With growing concerns over rising inflation and market volatility, Asia’s wealthy are turning cautious.
People with more than USD$1 million of investable funds are repositioning toward private assets to shield their investments from market volatility, Lombard Odier’s 2022 study about high net-worth individuals in Asia Pacific found.
Boomberg cited that the rich have increasingly shunned stocks and bonds to focus on their own companies or assets deemed safer such as gold and cash. At the same time, they’ve largely stayed clear of crypto, a market that’s proved particularly volatile.
A slump in tech stocks and soaring inflation amid rising interest rates have shaved off US$1.4 trillion from the cumulative wealth of the world’s 500 richest people in the first half of the year, according to the Bloomberg Billionaires Index.
That’s a reversal from the past two years, when central-bank largesse to combat the effects of Covid-19 helped boost assets and personal fortunes with them.
“APAC investors are becoming more conservative in their portfolio construction and are diverting to ‘safer’ alternative and private assets, whilst increasingly diversifying beyond their local markets,” said Vincent Magnenat, Lombard Odier’s Asia Regional Head.
Low liquidity concerns, particularly among older generations, underscore the enthusiasm for private assets, the Swiss bank said. The region’s investors seem to believe that those allow them to capture structural changes in a regulated and risk-managed way, it added.
The bank, which oversees about 358 billion Swiss francs (US$363 billion) in client assets globally, surveyed over 450 high-net-worth individuals domiciled in Singapore, Hong Kong, Japan, Thailand, the Philippines, Indonesia, Taiwan and Australia between May and June.
Lombard Odier offers wealth management services to private and institutional clients in Asia through our offices in Hong Kong, Singapore and Tokyo.
