What is the future of asset management and protection for family offices and high-net-worth individuals in the Gulf Cooperation Council?
That was the topic of a public discussion at the recent SuperReturn conference in Dubai - the leading private equity and venture capital event focused on the Middle East.
Lynda O'Mahoney of Ocorian and Samuel Cohen Solal, Managing Director of Sweetwood Capital, a specialised asset management and family office services provider took to the stage to discuss the changing world of family offices.
Titled 'In it together: family offices, private equity and venture capital', both O'Mahoney and Cohen Solal agreed the market looks promising for high-net-worth clients looking for asset diversification, notably in private equity. They also highlighted how the sector is benefitting from the professionalism of service providers in the region as the demands on them increase.
Lynda went on to mention that it is clear that family offices, like fund managers in the region, are expecting more from their providers as the market expands and the demand for sophisticated technological infrastructure increases. Those managing investments prefer service providers who act as an extension of their back office team while providing a professional and experienced operational oversight function.
Investors, although generally offering positive sentiment towards private markets, have been expressing caution. This is reflected in higher expectations of service providers to help provide peace of mind. Their demands on administrators are increasing regarding access to data and information on clear and transparent fees. Managers and investors alike want them to actively demonstrate the value they are adding to structures. Kathryn Miller, Alternative Investments Manager for Ocorian in the UAE commented:
"For private equity investment, Limited Partner (LP) sentiment is reflective of the growing demand within the industry of a greater need for transparency and enhanced reporting. Fundamentally, increased disclosure regarding fees and greater visibility and understanding of the value remains a focus for LPs."
The drive for greater transparency will come as no surprise in the region Kathryn went on to add, as "the regulator is keen to reinforce the notion that there is no place for weak corporate governance. Investors want the assurance of a robust risk management framework to mitigate operational risks, a feature of which is inherent in the DFSA's regulation. We have seen it become increasingly likely that fund managers and family offices will seek to secure the services of sophisticated, independent fund administrators. Their ability to provide the additional comfort investors seek from having an independent, comprehensive and robust corporate governance and control framework is a fundamental requirement when managing funds and investor commitments."
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