Family Office Priorities Shift Toward Allocation Strategy and Succession Planning

Ocorian's 2025 Global Family Office Report identifies a critical realignment of priorities among family offices worldwide, with asset allocation strategy, succession planning, and governance reform now dominating principal agendas. The report, drawn from consultation with family office leaders across multiple regions, reveals that 67% of respondents have elevated alternative asset allocation to a strategic priority, while 71% cite succession planning as either urgent or high-priority. This marks a material shift from 2024, when operational efficiency and cost management dominated the conversation.

For Asia-Pacific family office principals, this reorientation carries immediate implications. The region's regulatory environment—spanning Singapore's VCC framework, Hong Kong's OFC structures, and Dubai's DIFC jurisdiction—has matured sufficiently that principals can now focus on wealth strategy rather than compliance scaffolding alone. However, the concentration of succession and allocation pressures suggests that APAC family offices are simultaneously managing generational transition and portfolio repositioning, a dual burden that demands disciplined governance and external expertise.

The data reflects a broader market condition: traditional equity allocations have underperformed relative to expectations, forcing family offices to reconsider their strategic asset mix. Simultaneously, founder-generation principals in Asia are aging, and the next generation—often more globally educated and risk-aware—is demanding a seat at the table. This convergence creates both urgency and complexity for governance structures that were designed for single-principal decision-making.

Alternative Assets Now Command 34% of Family Office Portfolios

The Ocorian report documents a sustained reallocation toward alternatives, with the median family office portfolio now allocating 34% to non-traditional assets. This includes private equity, private credit, hedge funds, real estate, infrastructure, and structured products. In 2023, the equivalent figure was 28%, indicating a 6-percentage-point shift in just two years. For APAC family offices with AUM above USD 500 million, the allocation to alternatives reaches 41%, reflecting both greater sophistication and access to deal flow in the region's deepening private markets.

Singapore's VCC (Variable Capital Company) structure has accelerated this trend. The VCC framework, introduced in 2018 and refined through 2022, allows family offices to establish investment vehicles with lower compliance friction and greater tax neutrality than traditional corporate structures. MAS (Monetary Authority of Singapore) data indicates that approximately 280 VCCs are now registered, with family offices accounting for roughly 40% of new VCC formations in 2024. The shift toward alternatives is not speculative; it reflects a rational response to lower public-equity valuations and the scarcity of liquid investment opportunities in traditional markets.

Private credit represents the fastest-growing segment within alternatives, with 56% of surveyed family offices now holding direct or fund-based private credit positions. This reflects both the withdrawal of traditional banks from lending and the attractive yield environment for non-bank lenders. Hong Kong's OFC (Offshore Fund Company) framework has facilitated this by allowing family offices to establish credit funds with streamlined regulatory approval from the SFC (Securities and Futures Commission). The typical entry point for APAC family offices into private credit is USD 50–100 million, either directly or through fund vehicles.

Succession Planning Remains Unfinished Business for Two-Thirds of Respondents

Despite succession planning's elevation to the top priority list, the Ocorian report reveals a troubling execution gap: only 31% of family offices report having a documented, board-approved succession plan in place. This means 69% of respondents—including many with AUM exceeding USD 1 billion—lack a formal framework for generational transition. In Asia-Pacific, the gap is wider still, with only 26% of surveyed offices reporting comprehensive succession documentation. The discrepancy between stated priority and actual implementation suggests that family offices recognize the urgency but lack either the governance structure or the family consensus to move forward.

The barriers to succession planning are structural and psychological. Founder-generation principals often resist formalizing a transition timeline, viewing it as an implicit acknowledgment of mortality or diminished authority. Second-generation family members, meanwhile, may lack confidence in their readiness to lead or may harbor disagreement about portfolio strategy. Third-generation stakeholders are often entirely excluded from early-stage planning conversations, creating a knowledge vacuum that becomes apparent only after a principal's death or incapacity.

Only 31% of family offices have a documented, board-approved succession plan, despite 71% identifying succession as urgent or high-priority. This execution gap represents the single largest governance risk in the sector.

Regulatory frameworks have begun to address this gap. The DIFC (Dubai International Financial Centre) introduced formal guidance in 2023 requiring family offices managing AUM above AED 500 million to maintain a succession plan as a condition of DIFC registration. Singapore's MAS has similarly issued guidance on corporate governance for fund managers, including family office vehicles, that emphasizes board independence and documented decision-making processes. These regulatory prompts are beginning to shift behavior, but adoption remains uneven across the region.

Governance Structures and Board Composition Require Urgent Modernization

The Ocorian report identifies governance as a secondary but critical priority, with 58% of family offices reporting that they have upgraded their governance framework in the past 18 months. However, the upgrades are often incremental rather than. The most common change is the addition of independent board directors (64% of respondents), but fewer than half of those offices have established formal board committees for investment oversight, risk management, or succession planning. This suggests that governance improvements are reactive—driven by a specific crisis or family disagreement—rather than proactive or strategic.

The composition of family office boards remains heavily skewed toward family members and executives. Across the APAC region, the median family office board includes 4 family members, 2 executives, and 1 independent director. Best-practice governance calls for a majority-independent board with specific expertise in investments, risk, and family dynamics. Singapore's VCC framework does not mandate board independence, but the SFC's guidance for Hong Kong OFCs recommends that at least one-third of directors be independent. DIFC regulations are more prescriptive, requiring that fund managers establish audit and compliance committees with independent membership.

The shortage of qualified independent directors is acute in Asia-Pacific. Family offices are competing for a limited pool of individuals with simultaneous expertise in wealth management, regulatory compliance, and family governance. This has driven director compensation upward—typical retainers for independent family office board members in Singapore and Hong Kong now range from SGD 80,000 to SGD 150,000 annually, plus meeting fees. The scarcity of governance talent is itself becoming a constraint on family office professionalization.

Talent Acquisition and Retention Present Structural Challenges

The Ocorian report documents a persistent talent deficit, with 64% of family offices reporting difficulty recruiting and retaining investment professionals. The problem is particularly acute in Asia-Pacific, where family office headcount growth has outpaced the supply of qualified candidates. The median APAC family office with AUM between USD 250 million and USD 1 billion employs 8–12 investment professionals; five years ago, the equivalent figure was 5–7. This rapid expansion has created a talent squeeze, particularly for roles requiring expertise in alternatives, private markets, and regulatory compliance.

Compensation remains a key lever but is insufficient on its own. Family office professionals typically earn 30–40% less than their counterparts in traditional asset management, a gap that widens for specialized roles in private equity or private credit. However, non-monetary factors—including investment autonomy, family alignment, and long-term career stability—attract candidates who might otherwise pursue higher-paying roles in hedge funds or PE firms. The most successful APAC family offices are those that have built a clear career progression and have articulated a distinct investment philosophy that attracts mission-driven professionals.

Regulatory requirements are also driving talent demand. Singapore's MAS and Hong Kong's SFC both require that fund managers and investment advisors maintain specific qualifications (typically CFA Level II or equivalent). This creates a bottleneck: the pool of qualified candidates is smaller than the number of open positions. Several APAC family offices have responded by investing in internal training and sponsoring junior professionals through CFA or CAIA programs, effectively creating a talent pipeline.

Regulatory Complexity Increases Operational Burden Across the Region

The Ocorian report notes that regulatory compliance now consumes 12–18% of family office operating budgets, up from 8–10% in 2020. This reflects both the proliferation of new rules and the increased scrutiny of family offices by regulators worldwide. In Asia-Pacific, the burden is compounded by the region's regulatory fragmentation: a family office with operations in Singapore, Hong Kong, and Dubai must navigate three distinct regulatory regimes, each with different reporting requirements, investment restrictions, and governance standards.

Singapore's VCC framework remains the most family-office-friendly structure in the region, offering tax neutrality and streamlined compliance. However, recent MAS guidance on operational resilience and third-party risk management has added complexity. Hong Kong's OFC structure offers similar benefits but is subject to SFC oversight, which has become more intensive following the collapse of several fund managers in 2023. Dubai's DIFC regime is the most prescriptive, requiring detailed annual reporting and mandatory compliance certifications, but it offers advantages for cross-border structures and non-resident family offices.

Regulatory compliance now consumes 12–18% of family office operating budgets, up from 8–10% in 2020. APAC family offices face fragmented requirements across Singapore, Hong Kong, and Dubai.

The regulatory environment is unlikely to simplify; instead, principals should expect continued incremental tightening around ESG reporting, beneficial ownership disclosure, and sanctions screening. Family offices that invest in robust compliance infrastructure and engage early with regulators are better positioned to navigate future changes without operational disruption.

Next-Generation Engagement Remains Inconsistent and Underfunded

A striking finding in the Ocorian report is the gap between stated commitment to next-generation engagement and actual resource allocation. While 79% of family offices report that engaging the next generation is a priority, only 34% have established a formal program or budget dedicated to this objective. Next-generation engagement typically includes investment education, governance participation, and exposure to the family's philanthropic mission. However, many family offices treat this as an ad-hoc activity rather than a structured capability.

The consequences of inadequate next-generation engagement are significant. Studies of family office longevity indicate that wealth dissipates at a rate of approximately 30% per generation when the next generation is not adequately prepared. In Asia-Pacific, where many family offices are transitioning from founder-generation to second-generation leadership for the first time, this risk is acute. The most effective family offices are those that establish a formal next-gen program by the time the oldest second-generation member reaches age 30, allowing for at least 10 years of gradual knowledge transfer before the principal transition occurs.

The Ocorian report recommends that family offices allocate at least 2–3% of operating budget to next-generation programs, including investment education, governance training, and family meetings. This is substantially higher than current practice, but it reflects the long-term value of a prepared and aligned next generation. Several APAC family offices have begun to implement this recommendation, establishing dedicated roles for next-generation engagement and formalizing education curricula.

Frequently Asked Questions

What percentage of family offices have a documented succession plan?

According to the Ocorian 2025 report, only 31% of family offices globally have a documented, board-approved succession plan. In Asia-Pacific, the figure is lower at 26%. This represents a significant execution gap, as 71% of respondents identify succession planning as urgent or high-priority. The discrepancy suggests that while principals recognize the importance of succession planning, structural and psychological barriers prevent many from formalizing a transition timeline.

How much of a typical family office portfolio should be allocated to alternatives?

The Ocorian report indicates that the median family office portfolio now allocates 34% to alternative assets, up from 28% in 2023. For larger APAC family offices with AUM above USD 500 million, the allocation reaches 41%. The optimal allocation depends on the family office's risk tolerance, time horizon, and access to deal flow. Most advisors recommend that alternatives comprise 25–45% of a diversified family office portfolio, with the specific allocation tailored to the family's circumstances and objectives.

What governance structure is recommended for a family office with AUM above USD 500 million?

Best-practice governance for a family office of this size typically includes a board with at least 5 members: 2–3 family members, 1–2 executives, and 1–2 independent directors. The board should establish formal committees for investment oversight, risk management, and succession planning. Specific regulatory requirements depend on the jurisdiction: Singapore's VCC framework does not mandate board independence, but Hong Kong's SFC guidance recommends at least one-third independent directors. DIFC regulations require formal audit and compliance committees with independent membership.

How should a family office approach alternative asset allocation in the current market environment?

The Ocorian report suggests that family offices should approach alternatives allocation strategically, focusing on areas of genuine competitive advantage and access. Private credit has emerged as the fastest-growing segment, with 56% of surveyed family offices now holding positions. The typical entry point is USD 50–100 million through fund vehicles or direct co-investments. Family offices should prioritize relationships with experienced managers, conduct thorough due diligence, and maintain adequate liquidity reserves given the illiquid nature of many alternatives.

What is the cost of establishing a VCC or OFC structure for a family office?

The cost of establishing a VCC in Singapore typically ranges from SGD 15,000 to SGD 35,000 for initial setup, plus annual compliance costs of SGD 8,000–15,000. Hong Kong OFC structures incur similar costs, with additional SFC registration and ongoing regulatory fees. Dubai DIFC structures are more expensive, with setup costs ranging from AED 50,000 to AED 150,000 and annual compliance costs of AED 30,000–60,000. These costs are tax-deductible and should be evaluated against the tax efficiency and operational benefits of each structure.

Key Takeaways for APAC Family Office Principals

1. Prioritize succession planning formalization: If your family office lacks a documented succession plan, establish one within the next 12 months. Engage an external governance advisor and involve both family members and key executives in the planning process. The DIFC and MAS frameworks now effectively require succession documentation for larger offices, so early adoption positions you ahead of future regulatory requirements.
2. Evaluate your alternative allocation strategy: The median family office now allocates 34% to alternatives. If your current allocation is significantly lower, assess whether this reflects a deliberate choice or a structural gap. Consider expanding into private credit, which offers attractive yields and diversification benefits, but only through established managers with proven track records.
3. Upgrade board independence and governance committees: Assess whether your board composition meets best-practice standards (at least one-third independent directors) and whether you have formal committees for investment oversight and risk management. If not, begin recruiting independent directors with relevant expertise and establish committee structures aligned with your regulatory jurisdiction.
4. Invest in next-generation engagement: Allocate at least 2–3% of your operating budget to a formal next-generation program, including investment education, governance training, and family meetings. Begin this program at least 10 years before the anticipated principal transition to allow adequate knowledge transfer and family alignment.
5. Assess talent gaps and develop a retention strategy: Identify critical roles where you face recruitment or retention challenges. Develop a comprehensive talent strategy that includes competitive compensation, clear career progression, and alignment with the family's investment philosophy and values. Consider investing in professional development and CFA sponsorship to build a sustainable talent pipeline.

What to Watch in 2025 and Beyond

The regulatory environment for family offices will continue to evolve, particularly around beneficial ownership disclosure, ESG reporting, and sanctions screening. Singapore's MAS has signaled that it will introduce enhanced guidance on operational resilience and third-party risk management, likely by mid-2025. Hong Kong's SFC is expected to tighten oversight of fund managers, including family office vehicles, following the 2023 fund manager failures. Dubai's DIFC is expanding its regulatory scope to include family office governance and succession planning standards.

Asset allocation trends will likely continue to favor alternatives, particularly private credit and infrastructure. However, family offices should remain cautious about valuation inflation in private markets and maintain adequate liquidity reserves. The next-generation transition in APAC family offices will accelerate over the next 5–10 years, creating both opportunities and risks for offices that are unprepared. Principals who address succession, governance, and talent challenges now will be better positioned to navigate the transition and preserve wealth across generations.

For APAC family office principals, the 2025 outlook is clear: asset allocation and succession planning are no longer optional strategic initiatives—they are operational imperatives. The Ocorian report provides a comprehensive benchmark against which to evaluate your family office's positioning. Use these findings to initiate conversations with your board, advisors, and family members about the strategic priorities that will shape your office's evolution over the next decade.