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The top concern of super-rich, high-net-worth investors in Asia Pacific


Singapore has become the private capital investment hub in Asia.

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A new survey by Swiss private bank Lombard Odier shows that super-rich investors in the Asia-Pacific are shifting away from the “wait and see” approach they adopted during the pandemic. when concerned about market volatility.

A survey of 450 wealthy investors in the region – defined as those with at least $1 million in investable assets in Asia Pacific – revealed their top concerns.

These include how to manage current market volatility and geopolitical risks, as well as how to better diversify their portfolios to mitigate these risks, according to HNW Individuals Research. (HNWIs) in 2022.

Lombard Odier said the urgency of these strategies has increased since the survey in 2020.

“During the peak of COVID-19 in 2020, the majority of APAC HNWIs surveyed have not changed their portfolio characteristics and are adopting a ‘wait and see’ approach,” Lombard Odier said. , Head of Ultra-High Net Worth Personal Supply, Asia, said: Francois Aboulker.

“This is mainly due to a lack of understanding of the risks involved and uncertainty about how the pandemic will progress. “

High inflation

Currently, about 68% of investors in Singapore, Hong Kong, Japan, Thailand, Philippines, Indonesia, Taiwan and Australia have redesigned or changed their portfolios to better suit the conditions. current market.

Even if the impact of Covid-19 is global, there are significant variations in equity returns in different countries and certain asset classes are underrepresented in some markets.

Jean-Francois Aboulker

Lombard Odier

About 77% of those surveyed said rising inflation and the prospect of a recession were the most worrying issues. Singaporeans are most worried about this situation.

“Even Japan, where inflation has been near zero for more than three decades, is currently facing inflationary pressures and 69 percent of HNWI Japan is concerned about it,” the report said.

“Whether the Bank of Japan will make a tightening move remains unclear, but a third of Japan’s HNWIs believe it will happen in the next 12 months.”

Rate of increase

Wealthy investors in the region are generally less concerned about a possible rise in interest rates, mainly because they think most governments would be cautious not to raise rates to a level that would hurt growth. economic growth, the survey found.

However, Australian and Indonesian investors are not so sure. The majority of those surveyed in these countries, around 70%, say higher interest rates are a “significant worry.”

Geopolitical risks

Investors in the Philippines are most concerned about geopolitical instability, while Those in Hong Kong and Singapore also see geopolitical tensions as one of the top risks over the next 12 months.

These investors are worried about the impact of geopolitical risks and conflicts on the returns of their investments, with many expecting lower returns ahead. They are also concerned that they may miss out on opportunities during this volatile time.

Many in Hong Kong and Japan have questioned the effectiveness of their current diversification strategies in light of the current environment of “falling stock prices, widening credit spreads and long-term interest rates.” high term” negatively impacted their portfolios.

Two things happened

In an effort to reduce these risks, two things happened.

Super-rich investors in APAC have become more cautious and are shifting more from traditional asset classes – such as stocks and bonds – to investing in their own companies, survey shows.

Many have also put their money in “safer” assets like cash and gold. Some are also investing in private assets including private equity, private debt, real estate and infrastructure investments and investors in Singapore and Australia are leading the charge.

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In addition, many investors have left their home markets in the past two years. The report shows that, to manage post-Covid uncertainty, the result is a more global mix of their portfolios and Japanese and Indonesian investors are actively doing this.

“Even if the impact of Covid-19 is global, there are significant variations in equity returns in different countries and certain asset classes are not represented,” said Lombard Odier’s Aboulker. present in several markets.

“These investors are sophisticated and understand the importance of a long-term approach in finding assets outside of their home market, while reducing reliance on domestic factors.”



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