The Hong Kong Institute for Monetary and Financial Research (HKIMR) said surging geopolitical risks have raised the investment appetite for risk-management products among family offices.

The comments came as the research body of the Hong Kong Academy of Finance (AoF) conducted a survey over the sector's recent development, involving 101 institutions and 35 industry interviews.

More than 80 percent of the respondents have managed a net worth of US$50 million or more, with 44 percent of the portfolios they oversee exceeding US$1 billion.

Speaking at a press conference, Enoch Fung, AoF's chief executive and HKIMR's executive director, said Hong Kong remains a key investment hub for family offices, as 91 percent of the respondents are investing in the city.

The HKIMR said it expects philanthropy, "impact investing" as well as risk management-related products to become the major drivers leading the growth of the family office industry.

"[For] many of the different family offices, as they consider where they would operate and expand, be it the investment scope or their business footprint, it's very much a medium- to long-term decision," he said, addressing concerns about the ongoing war in the Middle East.

"There is probably one or two incidents that might affect their decisions. But overall, the most important thing for them in a very complex external environment is risk management.

"And we are seeing from our survey that many of the surveyed offices are increasing their demands and capabilities for risk management."

Giorgio Valente, head of HKIMR, noted that certain hedging and derivative instruments could be adopted to mitigate the market volatilities, while insurance products could also help to manage operational risks, such as that over cyber security.

The report also showed that local family offices are planning to invest more into "impact investing", which refers to an investment strategy that aims to create beneficial impacts on the environment or society, while earning positive financial returns.



Edited by Edmond Fong