Beijing Crowned Billionaire City But Where Are All The Family Offices?

Beijing now has more billionaires than any other city, including former front runner New York.

The Forbes 35th Annual World’s Billionaires List revealed that 2,755 billionaires were created over the last 12 months, 660 more than the year before and collectively worth over $13.1 TRN.

The growth generated through the pandemic equates to one billionaire being made every 17 hours, 100 of which now reside in Beijing helping the city to overtake New York as the billionaire capital.

Despite this extraordinary wealth, Family Offices are almost non-existent in Beijing – home to less than 5% of all Asia-Based Family Offices.

In fact, Agreus discovered that 25% of all Family Offices in the Asia-Pacific are located in Singapore followed by 20% in Hong Kong, 20% in Australia, 15% in India and the remaining 20% spread across Indonesia, New Zealand and various other cities, including Beijing.

With so much wealth being generated in Beijing, it is remarkable to see Family Offices in such small numbers but the shortage could be explained by the popularity of offshore jurisdictions, a lack of service providers or ongoing political unrest in the area.

Hong Kong and Singapore are neighbouring Family Office regions that offer corporate services, a growing talent pool and infrastructure that simply does not exist within Beijing, despite it being the Billionaire Capital.

That isn’t to say Billionaire Status will not accelerate Beijing as a Family Office jurisdiction and the new title might not be the only inroad. Beijing is set to become popular with current Family Office Leaders in other parts of Asia, according to a study by UBS.

Existing APAC-based Family Office Leaders were asked where they would be likely to open a second Family Office as part of the 2020 Chinese Family Office Report. Beijing was the fourth most popular answer given after Hong Kong, Singapore and the USA putting Beijing above both the UK and Europe as a destination of choice.

The same report also found that most of the operating businesses associated with Chinese UHNW Families are headquartered in Beijing (24%) and with the global push to IPOs, this too could result in more Family Offices being created in Beijing to manage new wealth.

But what will the Family Offices of tomorrow look like?

Today they look a little like this.

80% of Family Office CEOs based in Asia are non-Family Members showing an openness to fill executive positions with external talent, 44% of Family Offices across the Asia-Pacific have less than five employees and 36% of APAC-based Family Offices manage more than $1BN in Assets Under Management.

There is an extraordinary amount of wealth belonging to Family Offices in the East and the talent who keep their Family Offices going are paid just as well.

According to research conducted by Agreus as part of the Global Family Office Compensation Benchmark Report, Family Office Chief Executives in Asia take home more than $396,000, Chief Investment Offices are not far behind on $330,000 and both Chief Operating and Chief Financial Officers most often make in the region of $264,000.

Executives across Family Offices in Asia most commonly take home 31-50% of their salary as a bonus, offered by 35% of Family Offices as a discretionary bonus and 65% of others as a formulaic bonus.

With more wealth being generated and plenty of wealth yet to be professionalised, Beijing is set to become a popular destination for Family Offices and its growth will be a remarkable watch for the rest of the Western World.