One-third of Asia's wealth may change hands in the next five years

Gwyn Heidi Ng
Wave of succession coming to Asian family offices: UBS

In the next five years, ultra-high net worth families in Asia will see a huge wave of succession, said Anurag Mahesh, APAC head for UBS's global family office group, on the sidelines of the Global Family Office Summit in Hong Kong.

During that period, "about one-third of [Asia Pacific's] wealth is going to change hands, against 15 percent globally," Mahesh said.

Ultra high-net worth is an exclusive category — it's defined as someone with at least $30 million of investable assets — and there were only 46,080 such individuals in Asia last year, according to Knight Frank's 2017 wealth report.

According to that report, the total 2016 wealth of those individuals in Asia was about $4.84 trillion.

All good things come to an end

Younger Asian economies, according to the UBS and PwC Billionaires Report 2016, will soon see their "first-ever major inter-generational wealth transfer." Meanwhile, 90 percent of billionaire fortunes do not survive beyond the first and second generations, according to the report, which signals the rising need for family offices in Asia.

And that's when more ultra-wealthy individuals look for help from asset managers and wealth managers "to put in a governance structure… and articulate investment philosophy within the family," Mahesh said on CNBC's "Squawk Box."

Traditionally, Asian family offices have taken a low-risk approach, but they have been moving toward increasing their "allocation to emerging and developed equities," Mahesh said.

Breaking away from their usual "do-it-yourself approach," Asian family offices have in the past two years moved more toward a western model, allocating more money to discretionary areas they may understand less, according to Mahesh.

Another trend, he said, is that wealthy individuals are consolidating who manages their funds: "They have figured out that there is no real point in actually diversifying their wealth between four or five banks because you're not going to get that level of service that you increasingly need."