Asian family offices up on private debt, down on ESG

Marcus Baram
Author Marcus Baram
Marcus Baram is a contributing editor at Crain Currency, where he covers the intersection of finance and politics. Prior to joining Crain Currency, Baram was a staff writer at Fast Company and an editor at Huff Post. He has also written for outlets such as The New York Times, The Atlantic, and Vice. Baram is an expert on economic policy and has a deep understanding of the ways in which politics shapes the global financial system. In his role at Crain Currency, he brings a unique perspective to the complex and ever-evolving world of finance. With his keen analysis and clear writing, Baram helps readers make sense of the important issues impacting the economy today.
Jun 20, 2023
3 months ago
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Asian family offices, like those in the rest of the world, are concerned about the impact of inflation, rising interest rates and geopolitical risk weighing down the global economy.

Given this uncertainty and market volatility, almost three-fourths of them (73%) plan to maintain or increase their exposure to alternatives over the next 12 months, according to single- and multi-family offices in the Asia-Pacific region surveyed by Preqin.

One of the most attractive options among the variety of alternatives is private debt due to its diversification benefits and floating-rate nature in the face of higher interest rates. About 91% of respondents said their private debt portfolios met or exceeded their expectations over the last year — and 64% expect private debt to perform better in the next 12 months, with 63% intending to increase their exposure to the asset class during the same period.

That interest doesn't come without some concerns. The family offices surveyed "acknowledge that private debt is a relatively new asset for them compared with real estate and private equity," and many of them cited key challenges, such as a lack of expertise and limited access to high-quality private debt opportunities.

In addition, family offices offered an insight into the state of ESG (environmental, social and governance) in the region, with only 37%  having an ESG investment policy, while 43% did not and had no plans to adopt one. Only 6% of family offices surveyed exclude companies that have negative ESG impacts or are involved in controversial products or activities such as tobacco or weapons.

Marcus Baram
Author Marcus Baram
Marcus Baram is a contributing editor at Crain Currency, where he covers the intersection of finance and politics. Prior to joining Crain Currency, Baram was a staff writer at Fast Company and an editor at Huff Post. He has also written for outlets such as The New York Times, The Atlantic, and Vice. Baram is an expert on economic policy and has a deep understanding of the ways in which politics shapes the global financial system. In his role at Crain Currency, he brings a unique perspective to the complex and ever-evolving world of finance. With his keen analysis and clear writing, Baram helps readers make sense of the important issues impacting the economy today.