Singapore family offices eye Indonesian wealth opportunity

Monetary Authority of Singapore Aries Investment Management
Singapore’s tougher family office rules likely to attract more wealth
October 31, 2022
Sharon Sim - Aries Investment Management

Freshly created wealth in Indonesia is presenting opportunities for multi-family offices in Singapore, says Purpose Venture Capital co-founder Sharon Sim, who has also helped set up the Women in Family Offices network.

The robust family office ecosystem in Singapore is drawing ultra-rich Indonesians whose numbers are set to increase, driven by entrepreneurship and demand from the country’s large consumer market.

‘There’s a lot of newly created wealth in Indonesia and I think that’s where the opportunity is for us,’ Sharon Sim, co-founder and general partner at Purpose Venture Capital told Citywire Asia after speaking on a panel at the Maybank Invest Asean 2022 conference.

‘All those entrepreneurs who are now exiting [their startups] are sitting on cash and would need investment advice and education.’

Sim is also a board advisor at Aries Investment Management, a multi-family office (MFO), and chief executive officer of Ormand Capital, a Singapore-based single-family office and holding company of Ormand Corp, with businesses in various sectors across Indonesia.

Besides traditional businesses, Indonesia has produced 13 technology unicorns – private companies valued at over $1bn – including payment gateway Xendit and investment platform Ajaib.

The first wave of tech disruptors began well before the pandemic and included household names such as ride-hailing company Gojek and local online marketplace Tokopedia, with the two later merging to form GoTo. E-commerce company Bukalapak listed last year, raising $1.5bn at its initial public offering (IPO).

Sim expects more unicorns to emerge as the pandemic hastens the digitisation of services in Southeast Asia’s largest economy, with a population of more than 279 million.

The Indonesian opportunity

Aries Investment Management recently received its license from the Monetary Authority of Singapore and has a team in place, which is now in the process of onboarding families, with Indonesia a potential market for the firm.

According to Knight Frank’s latest wealth report, Indonesia’s ultra-high-net-worth (UHNW) population is expected to swell 183% in the decade to 2026. Indonesia had about 630 resident UHNW residents in 2020, which could rise to about 1,130 in 2025, Statista said. In 2020, there were approximately 21,000 millionaires in the country.

UK-based information services company GlobalData said in an April report that 26.8% of the wealth of Indonesian HNW investors’ wealth is held overseas.

Singapore already serves as a second home for many rich Indonesians who see it as a safe haven for investments. ‘Indonesians are very familiar with Singapore and so there is a natural affinity. Moreover, many of them are already here,’ Sim said.

A family office in Singapore has the additional draw of serving as an avenue for the wealthy to apply for residency. A better lifestyle is one of the key reasons of expatriation for high-net-worth Indonesian investors, the GlobalData report said.

Sim’s Purpose Venture Capital has so far invested in three startups: Zumvet, a digital health services platform for pets; Hydra X, a tech company that caters to digitalised markets; and Igloocompany, which offers keyless access technology for homes.

Purpose is primarily driven by the three co-founders, who invest their own money and invite like-minded investors to join them.

‘Since we are fluid, our structure lends itself very well to family offices,’ she said.

The trio believe in investing in companies that make an impact, be it on society or the environment, she said. ‘However, we also look at the profitability of the company. You must generate profits to sustain and grow the business,’ she added.

The company is yet to make any investments this year and is continuing to scout for opportunities.

Focus on women

As one of six co-founders of Women in Family Offices (WIFO), a network launched last month, Sim is a staunch supporter of women in the finance industry, whether as investors or as senior executives.

The network intends to build a community of professionals, and develop and grow talent for the family office sector, increasing the number of women, and, importantly women decision-makers, in the sector.

WIFO was co-founded by: Lee Bic Shan, founder and CEO, Amazste Global; Serene Tan, head of investment, Sun Venture; Serena Wong, head of advisory at Kamet Capital; Hui Hoon Goh, Junson Capital’s head of global fixed income; and Hwui Chooi Loh, chief investment officer at Keck Seng.

Currently, men dominate the setting up of family offices. Although many successful Chinese women who have built their own business are starting to make a difference, Sim feels that is unique to China.

‘Southeast Asian women are active in family businesses and may be co-founders, but they let the husbands take the lead,’ she said, adding that in future she hopes to see more women managing the family business or setting up their own.


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