What are Family Offices currently practicing?

The number of investment professionals ditching their fund managing jobs and moving into Family Offices is seemingly increasing over time. The rate that they are moving is more of a trickle than a massive flock, which is why it does not seem obvious. Estimates in the industry totalled the assets of family offices at a whopping $4 trillion. So what are these family offices allocating into public and private investments?
The increasing number of investment activities from family offices have begun to develop the interest of regulatory authorities. Lawyers say that as long as a family office is managing money of the immediate family, they won’t have to worry about regulators. However, if family offices are co-investing with other like-minded investors, they might be subjected to regulations as they are investing alongside external capital. Being regulated will mean added cost, so if family offices carry along on that path, they will significantly increase their operating costs.
Other speculations have reported that family offices are investing in VC due to the emergence of successful companies such as Facebook, Google, Twitter, Uber, and other Tech companies before some of them went public. Many family offices prefer private equity returns without having to pay for external managers, and majority of them know the companies well. Couple insider knowledge together with large funding, they expect around double-digit returns.
So what are the practices that family offices adopt to allocate their funding into public and private investments? We’re intrigued to find out ourselves. Join us at the upcoming EnRoute Private Capital Meeting happening in Kuala Lumpur, Malaysia on 28 March 2018 to find out. We have set up an environment where representatives from Family Offices will be discussing how they allocate their funding into private investments. Networking opportunities will be available, along with discussions on PE middle market opportunities in SEA and the link between artificial intelligence and investments.
Click here for more details on the event.

Artificial Intelligence and Investments – Are they linked?

At the current rate that technology is advancing, it will only be a matter of time before jobs will be replaced by artificial intelligence. Using driving as an example, it’s a hands on task where drivers have to stay alert in order to operate the vehicle. But today, we already have semi-automated vehicles available for consumer purchase such as the Tesla range of electric vehicles. Its onboard computers and cameras work together to stay in lanes on the motorway, controlling speeds, watching for hazards etc. The car basically operates itself on the motorway, allowing the driver to relax. Delivery companies have already began tests on automated fleets of lorries, allowing them to transport goods from A to B without a driver, all while staying in a safe convoy formation that allows the lorries to save fuel by reducing drag the way riders in Tour de France tuck in behind one another to conserve energy. That’s more efficient than if individual lorry drivers were operating these lorries.
Artificial Intelligence is the way forward, and countries such as China and the U.S. agree. The Government of Beijing recently invested $2 billion into building an AI development park in the city, and aims to surpass the U.S. in terms of AI leadership by 2030 with an AI industry worth $150 billion. Global tech giants have also began investing in AI, with companies such as Amazon, Microsoft, Google, NVIDIA & Nuance taking the lead. Google spent £263 million in 2014 to acquire DeepMinds, completing one of the largest AI acquisitions to date.
People are not just investing in AI, but are also using AI to assist them in managing their investments. According to Campbell Harvey, professor of finance at Duke University, AI will be a good thing for investors if human judgement is overtaken by what computers can predict. Fund management companies such as Fidelity and Vanguard use AI but were not inclined to answer when asked in detail, whilst BlackRock says they use AI to assist them in tasks that require heavy cognitive function.
Artificial Intelligence powered Exchange Trade Fund founder Art Amador says that artificial intelligence surpasses humans in jobs like these because it does not have the physical, emotional, and psychological weaknesses that humans have.
With Artificial Intelligence rising up the ranks so quickly, we have invited speakers in the private capital industry to share their thoughts and opinions regarding the matter, and what they think the future of investments will be with AI. Join us at the EnRoute Private Capital Meeting on 28 March 2018 in Kuala Lumpur, Malaysia to engage in thought-provoking debate and network with industry professionals. Other topics that will be covered include private equity middle market opportunities in the SEA region and Family Offices’ allocations into private investments. Click here to find out more details about the event.

One Belt One Road Initiative

China’s ‘One Belt, One Road’ Initiative to boost the global economy through international trade links by land and sea is an attempt to replicate the effect of the original Silk Road by creating two trade-routes: One by Sea, and the other by Land. Known as the 21st Century Maritime Silk Road and the Silk Road Economic Belt respectively, the routes will cover over 60 countries from Asia to Europe, going through South East, South, West, and Central Asia, along with the Middle East.

The OBOR Initiative aims to develop links between these countries and billions of dollars worth of investments into developing infrastructure including railways, ports, and power grids. The OBOR Initiative plans to boost the GDP Growth contribution from these regions to 80 percent by 2025, while pushing more than 3 billion people of the population into the middle class.

OBOR Initiative

(SOURCE: ‘The Belt and Road Initiative: Reshaping the global value chain’ report, jointly written by the ACCA and SSE)

South East Asia sits where the land and sea route meet, creating opportunities for the region. During the Beijing Bridge Road Forum held in May last year, 9 Memorandums of Understanding and agreements boasting RM31.26 billion were made between Chinese and Malaysian companies as a result of China stepping up its investments for infrastructure and imports for Malaysia. The Malaysian Prime Minister, Najib Razak, believes that the OBOR Initiative will yield massive benefits to Malaysia in terms of business opportunities, higher living standards, and better infrastructure.
The upcoming EnRoute Private Capital Meeting in Kuala Lumpur will be discussing opportunities in the SEA Market, where speakers will be talking about this initiative by the Chinese. If you happen to be in Kuala Lumpur on 28 March 2018, be sure to attend the meeting to understand how industry leaders perceive this. Other topics that will be discussed at the meeting include what Artificial Intelligence will do for investments and Family Offices’ allocations into private investments. Click here to find out more about the event.

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