Family Office Investment Dynamics, Conspicuous Consumption & Social Inequality & Redefining Local - E294

· Singapore,VC and Angels

“I hope they invest in the local ecosystem and not just in financial assets. The benefit of being wealthy is you can do what you want. Instead of a Lamborghini, can you invest in public art and public education? Can you invest in sports and things that a lot of people can enjoy? That improves the quality of life in the city and the people around you. It’s not just for your personal benefit. Hopefully, we build more robust and deep capital markets, which are things that New York and London have had a stranglehold on, and it would be great to be able to shift some of that center of gravity out to Asia.” - Shiyan Koh

“In the short term, family offices will continue to go up. So this problem-issue-uplift is going to continue because it's a function of Singapore working hard to attract wealth both from Europe and the US, and from China as well. That's going to continue in the next few years. I think more jobs will be created because more family offices will start to hit their two to three- year timeline to start hiring local professionals. That will start emerging as its own vertical.” - Jeremy Au 

“Every family is different. One of the concerns people have going to work for families is how much decision-making authority they will have. Ultimately, is everything going to be decided by the principal or will you have the latitude to build a more institutional investment process and committee? At the same time, there is an incredible opportunity in working with families that want to be aggressive, want to diversify, and build new platforms.I’ve seen friends come out from institutions to help bigger families build new verticals.” - Shiyan Koh

In a thought-provoking conversation between Jeremy Au and Shiyan Koh, several key insights regarding family offices and their influence on Singapore's economy were discussed. They explored the motivations behind family offices seeking global investments, the unique characteristics of family office landscapes, and the challenges and opportunities they present.

Key Topics Discussed:

  1. Global Investments: Family offices are increasingly diversifying their portfolios by seeking investments outside their home countries, driven by the desire for exposure to different geographies and asset classes.
  2. Role of Private Banks: While family offices typically receive advice from private banks, they seek additional opportunities beyond what traditional financial institutions can provide, particularly in terms of access to emerging managers or smaller funds.
  3. Allocation and Family Dynamics: Financial advice to family offices revolves around diversification, helping them move away from being solely exposed to their core operating businesses. Additionally, discussions around wealth transfer, familial decision-making, and philanthropy play a crucial role in shaping their strategies.
  4. Impact on Local Economy: Singapore has witnessed a rise in family offices, attracting talent and investments, which contribute to job creation and economic growth. Efforts are being made to encourage family offices to invest locally, contributing to the development of capital markets and supporting societal causes.
  5. Societal Considerations: Balancing the influx of wealth with social cohesion is a challenge, and conversations around social support, inequality, and defining the notion of "local" are ongoing. The importance of avoiding conspicuous consumption and embracing community engagement is emphasized.

This insightful discussion sheds light on the evolving landscape of family offices, their impact on Singapore, and the need for responsible investment practices that benefit both the family offices and the local community.

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Jeremy Au: (02:03)

Morning, Shiyan.

Shiyan Koh: (02:05)

Good morning, Jeremy. What caused you to wear the red shirt today? I'm a little bit, I'm not prepared for this moment.

Jeremy Au: (02:13)

I actually like wearing red. Ever since I lost like 20 kilograms, I've been like, okay, I can start wearing something other than black, and I think red has been a color I like, but yeah, I tend to wear it at home or on a casual day rather than a workday. But yeah, this is my red lucky shirt.

Shiyan Koh: (02:28)

Oh, okay. I don't know what you need luck for, but good luck.

Jeremy Au: (02:31)

Well, it never hurts to have more luck in life, right? On that note, I'd love to do a shout-out to two folks who very graciously gave us some feedback. I think that's Ryan Wu, as well as Michael Nette. Both of them gave some feedback about how the episodes could be better, what they liked, and in one case how to improve the sound volume for our mics. So that was good. Thank you so much for the feedback. So, what's interesting for you, Shiyan? Have you been on Threads?

Shiyan Koh: (02:53)

I have been on threads. Fastest product to a hundred million users even faster than ChatGPT. So I guess it shows you the power of Instagram to bootstrap new social networks, which I think is fascinating. It feels a little bit like Twitter in the early days. Everyone's still nice. The trolls haven't totally figured stuff out yet, and no one has automated their bots. So there's a little bit of people casting around being like, who am I here? And people are trying to find their tribes. Like, where's fintwit? Where's RealEstateTwit? where's EconTwit? Do hashtags work? So it's actually fascinating to watch a new social network try to form and see what things they borrow versus what things they come up with new, and so that's been interesting. I haven't actually posted anything yet.

Jeremy Au: (03:37)

Oh, what, so you've just been, you just went on and now you're just lurking on Threads?

Shiyan Koh: (03:41)

I'm like 90% of everyone else, right? Everyone is a lurker. It's the 1 -9-90. I'm not a huge poster anyway. It's not my medium, but they do say building an audience is one of the most high-leverage things you can do, so I should probably get on that.

Jeremy Au: (03:55)
Yeah. We started posting the BRAVE Podcast, and some of the videograms on Threads. I also use it a few times just to talk about stuff, but I haven't gotten much engagement. I think I've been a little bit niche. I think one of my first threads? I'm just trying to devolve to the word "tweets". Yeah, I was like, oh, let's compare which is worse, Manila or Jakarta traffic? Very niche. I obviously got zero engagement because no one knows.

Shiyan Koh: (04:16)

I think the audiences are different too, right?

Jeremy Au: (04:18)


Shiyan Koh: (04:19)

Because it's porting over your Instagram audience and that is probably different from your Twitter audience.

Jeremy Au: (04:25)

Yeah exactly, it's the professional audience. audience I think Twitter

Shiyan Koh: (04:27)

that's a little bit like, it requires you to kind of curate your audience to match what you want. On Instagram, it's much more visual. I follow more restaurants and artists and things. It's not really a work audience, so it'll take a little bit of work, but I am curious to hear what others' experiences are and if, are we making it a thing? Do we hate use it because Elon is ruining Twitter?

So it should be kind of interesting to see. It's not often that you see a brand-new social network start from scratch, and it does have advantages, right? It doesn't immediately feel like you're on an, in an empty room, which is like, I tried Mastodon, I tried a bunch of different sort of decentralized Twitter alternatives and it always felt like super nichey and a little bit empty, and so Threads, I think has the advantage that doesn't feel like that right out of the gate.

Jeremy Au: (05:14)

It's just interesting because Facebook continues to slowly die as a social network for people posting. But then, WhatsApp is growing nicely. Instagram is growing nicely, and now, they've launched Threads, which is kind of interesting because all those previous companies are now taking off, historically have been acquisitions, right? But in this case, they didn't acquire Twitter, they just acquired a talent leaving Twitter. So it's kind of an interesting continuation of that product by acquisition launch, strategy that Meta has.

Shiyan Koh: (05:42)

I mean, if it works, why not? It'll be interesting though. I mean, we think Facebook is dying, but it's really strong in other countries. So it continues to be like in all the countries where they rolled out Facebook basics, like Cambodia, and Myanmar, a lot of people think or use Facebook as their primary interface to the internet. They don't use Google or YouTube. As their primary interface. And so there's still something like 3 billion people who use Meta products, which is kind of insane, like that's half the world, and an even higher percentage of people who have smartphones, so it's still a BMS to be reckoned with.

Jeremy Au: (06:14)

Definitely. I was amused because in Singapore people use WhatsApp a lot, and I just found out recently I was in Manila for that trip and I realized that most people apparently use Facebook Messenger as the way to communicate with one another. So I was like, whoa. When I was in America using Facebook Messenger to get to talk to people, everybody thought I was a massive weirdo. People would just complain. It's like, why are you messaging me on Facebook?

Shiyan Koh: (06:35)

I mean, you are a massive weirdo. That's true.

Jeremy Au: (06:37)

Thank you, Shiyan.

Shiyan Koh: (06:39)

I know if it's your Messenger choice that drives your weirdness but just own it, man. Enjoy the weirdness.

Jeremy Au: (06:45)

My favorite is like all these apps that now trying to consolidate all different messaging apps into one. I can't remember one, it was called Pager or something like that, and I was like, this is like Trello back in the day, or Trillian or where it was like MSM Messenger, Aim, and ICQ put in one because people just like lost track of all the messaging apps and now there's like a new wave because not I'm getting messages on LinkedIn, WhatsApp, Messenger, I don't know. Fun times.

Shiyan Koh: (07:08)

It's terrible. It's terrible and it's overwhelming.

Jeremy Au: (07:10)

It's that XQCD, right? It's like, there's like 20 universal standards out there, air quotes, and then someone's like, oh, that's terrible, there's 20 universal standards. We should create a universal standard that encompasses all the standards. And after they do that, there's like, now 21 standards. Anyway, that's my XQCD. My favorite webcomic that I pretty much send to like either another VC or founder, almost like every quarter I would say, because I think it's natural, so every time there's the raw fragmentation, everybody's like, let's create a new universal standard to consolidate the space, and we end up just creating another right? Well,

Shiyan Koh: (07:44)

You never sent me an XKCD comic, I left it out.

Jeremy Au: (07:47)

What? Okay, you got to paste it. I'll send it to you after this. This is great. All these webcomics. So yeah, I wanted to share that you had a wonderful session earlier this week by Hustle Fund, talking about family offices.

It was three hours. I meant to tune in for one hour and I guess I have to listen to the recording for the other two hours, but basically, it was about family offices, and then he covered both the US as well as Singapore, and Southeast Asia. So I thought it was really interesting to hear those profiles where you got them to share about their backgrounds and yeah, investment strategies, and think folks are very curious about this in Asia, right? Obviously, it's a net inflow of wealth to Southeast Asia. That's one, but two, also, people are exploring them as opportunities for either investment, from the founder's perspective, but also VCs are looking to fundraise from them for the LPs. So quite an interesting topic. I'm just kind of curious, why did you decide to put it together and how did it come together?

Shiyan Koh: (08:39)

Yeah, I mean, as you said, it's something that people have a lot of interest in, whether it is, we have some family offices that are LPs, and so they are kind of interested in meeting other VCs, finding other investment opportunities, and then, of course, our VC friends are like, Hey, I heard there are lots of family offices in Southeast Asia. How do I get to talk to them? And so it seemed like there was enough interest on both sides to pull together a quick event that would have Pretty broad appeal and it's a relatively new phenomenon in Asia, whereas I think it's a much more established phenomenon in the US and Europe who have longer histories of institutionalizing family wealth. So we also thought like a compare and contrast between the two markets would be useful for folks. And so maybe we can start with definitions a little bit because I think the family office is a little bit nebulous. But generally, when we talk about it, it's an investment vehicle that is the result basically of a family having amassed some amount of wealth may be from their operating business and they're kind of like, Hey, we built a great manufacturing company, or we built a great, you know, distribution business or whatever it is, but we want to be able to invest in other things and diversify our wealth to not just encompass our core operating business, let's set up a vehicle, and figure out how to do that. And I think there's a real range of like pretty informal things where it's like the uncles got together who had built the business and they're like, Hey, let's just invest in property together, or let's go in and like invest in my friend's kid, or whatever it is to pretty professionalized and institutionalized institutions where they've hired professional investment managers, they might handle tax and other strategies in-house as well. we can also talk about the difference between single-family and multifamily offices, but that's sort of what a family office is. It's sort of like the money came from some operating business. They're looking to formalize and try to diversify their wealth and invest in other assets, and you can kind of have a range of things that they invest in. I would say that in general, and this is not across the board, but I would say the US and the European families tend to be more institutional. They're more likely to have hired an outside asset manager. Obviously, you need a certain scale to be able to support staff, but I think in Asia, even with pretty large sums, often the family is much more involved. rather than outsourcing the whole thing to professional money managers. And then I would say also that in the US and Europe, there's a lot more focus on tax and tax optimization versus in Asia where we have sort of more straightforward, tax.

And in Singapore, in particular, where we don't have an estate tax, there's less need for sort of extreme tax optimization. And then just to finish out the definitions, multifamily offices are basically folks that manage the money of multiple families. A little bit to get scale, and also take advantage of being able to access kind of more professionals when you kind of have the scale of multiple families' money kind of being pulled together. But yeah. Let's, let's start there and where should we go from here, Jeremy?

Jeremy Au: (11:44)

Yeah, I think it's interesting because it's a net inflow of wealth to AsiaPac and to an extent therefore Southeast Asia and to Singapore as well. I think a lot of this is because, as of this year, 9% of all global family offices are in APAC, and 60% of those family offices are in Singapore, and this is something that's happened over the past five years. I mean, five years ago family offices in Singapore were very, very small. But since then, I think due to intentional, industrial, and monetary policy and tax incentives not as grown from effectively very low by all the magnitude to where it is today.

So the average AUM m seems to be about $800 million for an APAC family office. So there's obviously a net inflow of billions of dollars into the Southeast Asia region. So these are some of the statistics that are here. So one of the questions that came up and I was kind of interested in was like, what is the spread, how much are they distributing to public markets? How much are they distributing versus, real estate versus startups, so I think obviously, everybody who's a techy is kind of like waiting for that down arrows. How much of that wealth is actually allocated to private tech assets? So, kind of curious about, from your perspective, how you think family offices think about their asset allocation in APAC.

Shiyan Koh: (12:52)

Oh gosh. There's something we say which is, you've met one family office, you've met one family office. They are incredibly diverse. They're all at different parts of their journey. And so, I would say that depending on who is calling the shots, they'll have very different kinds of risk appetites and profiles, but I would say in general, most of the families that we meet here in Asia, outside of their core operating assets, they tend to go into real estate first. You know, it's kind of something that's like familiar and solid. And then public equities and possibly institutional debt, and then alternatives. And so the allocation to alternatives is much lower, I would say, than in the US. And in terms of startup investing, you're more likely to see it when the younger generations have become more involved. They're often more keen to explore technology and more comfortable investing in it necessarily than the older folks. And so, it really is kind of across the board, and a big part of the conversation that we had on Tuesday with our speakers was, how did you even decide to get into venture capital as an asset class? Like, the three folks that we spoke with, you know, they came from pretty traditional family businesses and they each had an interest basically in innovation and technology that kind of led them towards those allocations, and they all sort of learned by doing. Whether it was learning by doing and making directs and then making a decision that, hey, we're not really staffed to do directs as a major thrust of our strategy and we would rather actually allocate to managers.

So, it's pretty, I think of it as a cycle, which is like often, families don't think they want to pay management fees. And so they will try to go direct first, and then, they'll realize that unless they have a huge investment staff, they're not really staffed to go direct. And then they'll kind of turn the corner and be like, okay, let's allocate to managers, and then come back around. There are a few family offices that do have pretty robust direct programs. They tend to be bigger, and or they have a history of investing direct, and the principal's very comfortable with it. But I would say that's the exception rather than the rule.

If you made your money in commodities, in construction, in real estate, your first instinct isn't like, let me go build a direct portfolio because it just doesn't feel that familiar, and so, they tend to allocate more to managers first. But even then, I think for emerging managers who want to raise from family offices, there's still a big education process because the illiquidity of the asset class, it's a 10-year fund. And the risk profile is just so different, I think, from a lot of other assets that they're more familiar with, and so, you really need to spend the time to build the relationship and educate folks a little bit on what they should expect.

Jeremy Au: (15:36)

Yeah, I, I think it's something that, as a result, I think many VC funds are starting to prioritize reaching out to family offices to have that conversation. And I thought it was interesting because the guest was talking about how there was a two-way education process going on, right? I think it was one that was family offices talking to VC funds about what their allocation strategy is, what you just talked about. other hand, like you said, they're very much learning from the VC funds about how to deploy, what to look out for, and even pro-rata rights. Follow on opportunities to invest in that, and go direct as a result. So I thought it was a quite an interesting conversation.

Shiyan Koh: (16:09)

Yeah. and I think there's an aspect of it also, which is like not purely financial where they like learning about new technologies. So even if it isn't directly relevant to their family business, there's an aspect where they're like, Hey, I want to know what's on the frontier. Um, through my fund investments, I really want to be exposed to, a different, type of founder or a different set of industries, and this is like one way of learning I have some skin in the game, but I'm also getting things that are not just financially oriented. I'm also learning about space or biotech or AI or whatever the case may be. And so I think that's something for emerging managers to also bear in mind, which is to be able to offer that kind of access and exposure to your LPs as well.

Jeremy Au: (16:54)

I think the other part that was interesting as well was also actually the geographic diversification piece, which was that the Asian family offices are looking for more exposure to the US. You know, the European and the US are looking for more exposure to APAC and probably southeast Asia, after they look at South Asia and China. So I thought it was quite interesting to see that in my head, I think a normal, lot of VC fund managers would probably tackle local family offices because of geography, proximity, but I thought it was interesting to see that crisscross and flights or across the world.

Shiyan Koh: (17:23)

Yeah, I mean, I think one other feature of the local family office landscape is that while they don't necessarily hire institutional money managers in house, they often take a lot of advice from private banks and That's where they see a lot of their flow. Private banks will offer products to them and say like, Hey, do you want this BlackRock fund?

Do you want this KKR fund? Whatever it is. And, they get paid a placement fee placing out, you know, a billion dollars worth of their latest $10 billion fund or whatever the case may be. And so, They are looking for access into other geographies and asset classes, um, that are not necessarily mediated by the banks, and feeling that maybe the banks are, the bar to get through the bank, get on the bank platform is pretty high.

You have to be a pretty big fund and a big name. And if you're looking for exposure to more emerging managers or smaller funds, you're just not going to find it through your private banker. And so, there is an aspect of them trying to like, go overseas and find exposure that is not available through their normal kind of professional advisors.

Jeremy Au: (18:35)

What advice would you normally give or have you seen been given to family offices?

Shiyan Koh: (18:40)

In terms of allocations or?

Jeremy Au: (18:43)

Yeah. Allocation or common answers to common questions that you have while having a discussion with a family office.

Shiyan Koh: (18:50)

I mean, I think there's like financial advice and then there's like like family and managerial advice. So I think on the financial advice stuff, a lot of what folks try to do with the office versus diversification, right? Which is like, you don't want to be a hundred percent exposed to your core operating business. How do we help you over time get more different exposures and do it in a way that you're comfortable with? So I think a lot of that work initially is just to be like, okay, you are right now a hundred percent exposed to real estate. How do we take that down to like 90% and then 85%, cause it's a process. It takes time. It doesn't happen overnight. but I think the peculiarity of families is also just like they give advice on, Hey, how do you think about wealth transfer to the next generation? Are your kids to be learning about, um, Do you expect your kids to work in the family business?

Do you expect them to take over the family office? What is the role that you expect them to have? I think often some of those conversations are probably even more important because, there is those are your shareholders, right? There's a familial dimension to decision making and I think JP Morgan, their wealth practice puts out a pretty good pamphlet that walks families through like questionnaires and conversations with each other that maybe the patriarch or matriarch never thought about, right?

They were just busy building the business and then now they're like, okay, great. I got this thing. Okay, but what next, right? And so I think that's like an interesting conversation. And also around like philanthropy, like, hey, We've been lucky. Um, how do we want to, how do we want to represent some of our philanthropic interests through the family office as well, right?

What are the causes that we care about? How can we show up for our society? And you actually see this in the latest MAS guidelines for family offices, which is that for family offices setting up in Singapore, they're trying to incentivize them to invest for climate and also broader ESG types of solutions. As an island, obviously, climate change is a big concern for us, but also to invest more in local companies, and local both listed and unlisted equities and credit, so that it isn't just amassing pools of capital in Singapore, it's actually going to also have some sort of knock-on effect into the real local economy.

Jeremy Au: (21:22)

Yeah, I think that's the question about how it interacts with the local economy, and I think that's in the context of APAC. Obviously, that's in the context of Southeast Asia and Singapore. So I think what's been interesting is that Singapore has now recently put in a mandate for 10% of investments to be in Singapore. So that obviously ranges to various asset classes, from real estate to commercial to private assets and equity investments. So I think that's one thing they've done.

I think they also now require two non-family members to be part of the investment team, per the family office. But there is a kind of like a waiver or extension time period for, I think there are several years to find that person to join the local family office. So I thought it was interesting. I think we really started seeing some of those jobs. I think Ray Dalio has a big office and a lot of folks have been pretty excited about it, I think they're hiring for about five roles in the Singapore office. One of them is a VP level, to handle some of the philanthropic work, APAC, decision-making, lobbying, and regulatory conversations.

And then I think they're also looking for a Chief of Staff to work with one of the principal levels. So I thought it was quite interesting. A lot of folks I know are curious or interested in applying for the role. So, I think there's a big version of local jobs. The number says that they've hired about 1,500 folks over the past five years in Singapore, so I think it's been interesting to see those links.

Shiyan Koh: (22:39)

Family offices have?

Jeremy Au: (22:40)

Yeah, 1,500 drops in Singapore over the past five years. This came up in a ministerial parliamentary Q&A, a few months ago.

Shiyan Koh: (22:47)

I guess that's more than I would've expected. I guess the question is, are we just shuffling jobs around?

Jeremy Au: (22:51)

It's a range. It's not just pure investors.

Shiyan Koh: (22:53)

Are there even enough Singaporeans to go around?

Jeremy Au: (22:54)

Well, I mean there's another reply I saw a few months ago. It's like there is a critical shortage of family office talent. And I'm like, no, I'm sure we can find somebody from the banking side or consulting side that can be there, right? And I think thousand 500 jobs are not just pure investment roles. They're also like, back office, middle office roles as well. But I can imagine that slowly becoming its own small vertical, specialized because I think it's different working for an institution versus working for a family office. I think there are different sensitivities, but also different SOPs and rules to handle, so I think it'll be an interesting, emerging skillset, I guess, or specialization that folks will have.

Shiyan Koh: (23:26)

Yeah. I mean, I think went back to the sort of like every family is different. I think one of the concerns people have going to work for families is, how much decision-making authority do you actually have. Is everything ultimately going to be decided by the principal or do you have the latitude to build a more institutional investment process and committee and whatnot? And how solid is your mandate? I know a number of folks who worked at family offices who launched and then as the market turned, basically their principal was like no more investments for the next 12 months. And they're like, okay, what am I going to do? Like, sit on hands. So I think that is one of the concerns that people have working with families. But at the same time, there is an incredible opportunity in working with families that want to be aggressive, want to diversify and build new platforms. And so I've also seen friends come out from institutions to go help bigger families build new verticals, and so that's pretty exciting as well.

Jeremy Au: (24:17)

Yeah, and I think it shows up in different ways as well for those jobs, right? I think there are obviously lots of related sector jobs. So for example, I can imagine private banking or the lawyers, tax advisory. You know, these are not necessarily folks who are part of the funds, but adjacent, and I'm sure they have much more business as a result. That's one.

Two, of course, and this is the trickle-down on the living side. I think Singapore does benefit from being a great place to live. You know, and historically has been for the past 20 years, right? And so I think a lot of folks are not just, you know, setting up a family office, but there are family members who are now choosing to live in Singapore and I think it's an interesting dynamic as well. I think that's where I think some of the sensitivity at a government-slash-societal level kind of kicks in, right? I thought it was an interesting dynamic where all these different factors are in play.

Shiyan Koh: (25:00)

Yeah, I mean I think it definitely makes Singapore more interesting, but I would sort of, I would encourage people, if you're coming to set up a family office here, don't just live in your bubble. Actually, experience Singapore, be part of society, and contribute to it, I think it would be weird to just, I don't know, I think it's like easy to live in, in a bubble in Singapore. So perhaps we might suffer from the same accusation that we live in our own bubbles. But you know, it isn't the Singapore Orchard Road or MBS or whatever it is, right? There's so much more to the country than that.

Jeremy Au: (25:29)

Yeah, you know, I, I think I've known Melissa Kwee, the former head of the National Volunteer Philanthropy Center for many years. She's always been a huge advocate for families to be giving back and engaging. And I actually enjoyed the recent Straits Times article where I think she said, Hey, you know when we think about these net inflow of ultra-high net worth indi individuals, I think it's not just a function of obviously providing jobs, hiring, but also being seen as being part of the community, right? And I thought that was a really important piece because if Singapore really becomes that Switzerland, right, which is I think a very comparable dynamic for family offices and family wealth, then I think there needs to be that social contract, right, in that sense, to be rebuilt for every wave of immigration and emigration.

Shiyan Koh: (26:09)

It is really hilarious though what people do. Like I have some Nordic friends and they did a like pick-up litter day. So they got their kids together and they decided they were like going to pick up litter in their neighborhood, but there wasn't enough litter to pick up, and so like the kids were fighting over which piece of litter to pick up. And then, my friend was like, many of the locals seemed very concerned on their behalf that they were out in the sun picking up litter. And an auntie even bought her a packet drink, and was like, come in out of the sun, stop picking up litter, which I thought was pretty hilarious. But yeah, I appreciate the sentiment, but I do think it's funny that they had to fight to pick up the litter that they couldn't find.

Jeremy Au: (26:53)

I think the flip side of doing good is obviously, not triggering, right? I think Melissa Kwee kind of, I found the article that she said, one of our national issues is really social cohesion, which is the flip side of social inequality, said, Ms. whose family manages hotels and commercial properties across the region. The suspicion of and resentment of foreigners coming here to disuse Singapore, leave a bitter taste in people's mouths because of conspicuous consumption. I think the word conspicuous consumption a big one, cause I was in a Grab recently, and basically, we were stuck in traffic near Central Business District and I remember there were about 30 Lamborghinis that were just like in a group, and I think there was just maybe a club just trying to drive together. They'll drive, there were 30 Lamborghinis driving together. And all of them were stuck in traffic because it's just not a good time to drive. So I'm not sure what they were thinking. I remember, I just saw the driver just kind of like pull out his phone and I was just watching him do that and he started recording, you know, that long, half of them had made a turn. Half of them stopped waiting for a turn. He just did that pan on video. I was thinking to myself, man, a voter was lost today, you know, based on this video recording. Right. Because I think conspicuous consumption can be quite, I think it's, it's Singapore's dense. I think it reminds me a bit of New York City as well to some extent. Anyway, I think avoiding bloopers like that is important, right? Because any kind of conspicuous consumption is, you know, inequality is not, It's not fun to look at ever. Right?

Shiyan Koh: (28:14)

Yeah. it's not fun to look at, but it exists right? I mean, that's like a whole separate conversation about social support and redistribution, which is probably not in the mandate of this podcast, but we can, we could chat about that offline and this discussion about how we don't actually have an official poverty line and why that is the case, and why we should.

Jeremy Au: (28:32)

Yeah. I think there is always a strong, parliamentary debate and I think it's a lot of Intersections between obviously, immigrant versus non-immigrant, local versus foreigner, high wealth versus low wealth middle class versus, you know, I think there's all these kind of dynamics that make it very difficult. But I think it just kind of goes back to like, as we talk about family offices and so, so forth, I think that there's a lot of upside to it, right? Which is, I think stronger investments and investments help create jobs, and investments can help drive, you know, kind of like debt, global sharing. So how we minimize the downsides from a societal perspective is really important as well. I think there are a lot of good folks as well.

Shiyan Koh: (29:04)

I think the local and foreign thing is an interesting one because like if we really think about it, this is an immigrant country. know about your family, Jeremy, but my grandparents are from China.

Jeremy Au: (29:15)

Yeah. My great grandparents. My grandparents.

Shiyan Koh: (29:17)

So like, unless you were like Orang Laut and you were like native here when the British showed up, like very few of us are actually really native and as an immigrant country, I think it is an interesting question to ask like, what does local actually mean? When do you become a local?

Jeremy Au: (29:31)

When you do national service, for Singaporean males is a big one.

Shiyan Koh: (29:35)

Okay, but how about women? We, don't do NS, but like, does that make us not local? It doesn't, right?

Jeremy Au: (29:40)

Well, I'm just using Reddit as a threshold on this one, public opinion.

Shiyan Koh: (29:46)

No, no. no. But it's an interesting question, right? Which is like, I don't think we actually really talk about that. What makes someone Singaporean versus not? When does someone get to claim to be Singaporean, and, when do we accept? When do we accept others? So like I've met people who've lived in Singapore longer than I have. But I have a red password and they don't, and I would make some claims that they are more Singaporean than I am. So I don't know, perhaps a topic for a different day.

Jeremy Au: (30:08)

Yeah, I guess, you know, as we look forward, what do we think will be the future for, say, family offices in Singapore and Southeast Asia? Looking ahead, down the road. For me, I think the short walk term, one that's obvious to me is that I think it'll continue to go up actually. So this problem-slash-this issue-slash-uplift is going to continue because it's a function of. I think Singapore working hard to attract wealth both from obviously Europe, from the US and also from China as well. So I think that's going to continue in the next few years. And I think two, is, like you said earlier, Shiyan, it's like, I think more jobs will be created because more and more family offices will start to hit their two to three-year timeline to start hiring local professionals. So that's going to start emerging as its own vertical. What else do you think is going to happen?

Shiyan Koh: (30:53)

I think there's like, what I hope will happen, I don't know what will happen, but I'm hoping that this isn't just a place where they come and park funds, but they actually do invest in the local ecosystem and not just financial assets. I guess the benefit of being wealthy is like you can kind of do what you want, maybe instead of a Lamborghini, like, can you invest in public art? Can you invest in public education? Can you invest in sports? Things that, you know, lots of people can enjoy? Cause I think that kind of improves the quality of life for the city around you and not just for your own personal benefit. Yeah, I mean, we can hopefully build more robust and deep capital markets which I think is something that New York and London have had a stranglehold on and it would be great to be able to shift some of that center of gravity out to Asia.

Jeremy Au: (31:37)

Yeah, I think that's a super fair point. I think the arts in New York City are heavily, if not mostly supported by patronage, not of course with tourism as well. So I think that's going to be interesting, I think the side effect is that we may potentially see more patron patronage. I've heard the National Gallery is a popular place for lots of folks. It means a beautiful venue is a beautiful space with philanthropy and opportunities as well. So I think that's interesting as well. Yeah, I think one thing we'll continue to navigate, I think the conversation to help our society. I think the social contract continues and I'm quite hopeful that it improves over time. We'll just check back in on this, I guess, in a few years and see how it goes.

Shiyan Koh: (32:12)

Sounds good. Let's leave it there.

Jeremy Au: (32:14)

All right. See you.

Shiyan Koh: (32:15)

See you.