Singapore’s The Global CIO Office aims to grow its assets under management to US$1 billion in two years by meeting the demands of ultra-rich investors, according to its managing director Johan Jooste.
He describes it as a "reasonable target" for the newly-minted investment outsourcing firm.
"Much of this will depend on the depth of the relationships that we forge. Our model allows us to scale to a very significant extent," Mr. Jooste says in an interview with Asia Asset Management (AAM).
His firm, which operates under the regulatory licence of Singapore’s Purple Asset Management – which he also heads – started business on September 26.
In investment outsourcing, institutional and wealthy investors hire a third party to manage all or part of their portfolios.
Mr. Jooste says family offices are also considering this move as it helps them to save costs. That’s the investor segment his firm is focusing on – both single and multi-family offices, and especially those with a net worth of at least $30 million.
"The flexible and cost-effective nature of outsourced chief investment officers help wealth managers keep up with varying client and investment product demands. This helps to not only alleviate the administrative burden and expenses associated with it, but to also allow the family to focus on its own core activities," he says.
The ambitious goals of his firm are underscored by the growing number of millionaires in Singapore.
According to a report by Credit Suisse Research Institute last year, the city state had 183,737 millionaires in mid-2018, an 11.2% increase from 2017. Around 1,000 of them were ultra high-net-worth individuals with more than $50 million of assets.
By setting up shop in Singapore, Mr. Jooste says his firm will also be able to serve other wealthy investors in the region, as well as become one of the early players in investment outsourcing, a space that he describes as being “largely unoccupied for now”.
"As such, this is an opportunity for The Global CIO Office to establish ourselves in a niche that has the potential to go mainstream in the medium term," he says.
He says there are not many investment outsourcing firms setting up base in Asia because unlike in the more mature US and European markets, “the rise of the wealthy family in Asia is a new concept”.
“Many families are not set up in formal structures yet, and this is a clear growth area,” he says.
"At the point where wealth transfers from the first generation to the second, a family office is often a natural way to smooth the process and ensure an enduring legacy. There is a growing number of such transitions occurring in Asia, compared to the US and Europe where the establishment of the family office is a less frequent event," he adds.