In exactly five words, how would you describe what you do?
One-stop shop for UHNW families.
What is FXHB Asset Management’s core investment philosophy and its evolution?
Our investment philosophy emphasises social responsibility, prudence, and being at the forefront of innovation. As a multi-family office (MFO), we are cognizant that every family has its own unique goals and risk appetite. Therefore, we tailor portfolios to each unique family’s objectives while still sticking true to our investment philosophy.
Over the years, families have increasingly adopted agile investment approaches to expand beyond traditional, more conservative investments. This shift in investment strategy requires family offices to enhance our expertise and range of solutions.
We have been involved in active investing — often direct investments or co-investments — alongside other family offices, private equity firms, and venture capital firms. This approach provides greater control, lower fees, and the potential for higher returns. However, it also demands a deeper level of expertise, governance, and due diligence.
How does FXHB Asset Management approach direct investments in private companies or startups?
On that, our stance is active and collaborative. Our belief is that we are capable of adding value beyond financial capital, and we exhibit this by injecting our resources, offering mentorship, and facilitating introductions to corporations and partners. This proactive involvement enables us to closely monitor our investments and make necessary strategy adjustments when needed.
Due to the size of our team, we maintain and collaborate with an international network of partners, including venture capital firms, angel investors, accelerators, asset managers, banks, and legal professionals. They provide us with valuable insights into numerous deals and help us better understand the intricacies behind them.
In light of recent events, have there been shifts in FXHB Asset Management’s portfolio diversification across asset classes or regions?
Most family offices are often positioned to take a longer-term view. Amid increasing global uncertainty and geopolitical risks, effective risk management is crucial to all investments. We have since adjusted our portfolio to align with an extended investment horizon, diversifying it across various asset classes such as alternative investments, which include private equity, hedge funds, real estate, and technology startups.
What lessons have you gleaned from how the broader Singapore financial community perceives family offices?
Family offices often find themselves in the spotlight, with the financial community showing a keen interest in their contributions to Singapore and their investment choices. While our family office maintains strict confidentiality regarding the families we serve, we always strongly advocate the importance of social responsibility and localisation for the families who have entrusted us with their funds. This ethos permeates our hiring practices, partnerships, and investment strategies, shaping our overall approach to business.
We always strongly advocate the importance of social responsibility and localisation.Carney Mak, head of investment (FinTech) at FXHB Asset Management shares his insights from the local financial community’s view on family offices
What’s your stance on ESG investing, and do you see any trade-offs with returns?
While there is undeniably a trade-off between ESG considerations and risk and return, it’s important to recognise that not all ESG investments are identical; a wide range of approaches and strategies exist, each differing in its level of integration, impact, and performance. Ultimately, the decision to incorporate ESG considerations into an investment portfolio should be based on investment objectives, risk appetite and,most importantly, the cornerstone values the family truly believes in.
How do you position FXHB Asset Management’s portfolio to capitalise on tech advancements, especially in sectors like FinTech?
Investing in the tech industry can be a lucrative yet complex endeavor. Zooming in on the FinTech space, which also comprises various sub-sectors and themes, it is advisable to consider our investments based on our expertise. Further diversification is possible, but it should be determined by the business’ lifecycle stage and asset liquidity.
There is also a range of instruments to choose from, including publicly traded FinTech companies on stock markets, digital assets on cryptocurrency exchange platforms, Exchange-Traded Funds (ETFs), venture capital funds specialising in early-stage FinTech startups, and direct private equity/debt investments in FinTech startups.
Over the years, we have allocated a substantial portion of our portfolio to venture capital and private equity investments in FinTech startups. These investments offer opportunities for significant growth and alpha generation. Still, while our firm remains optimistic about the growth potential within the FinTech sector, we acknowledge the dynamic and rapidly changing nature of the landscape. That’s why we are committed to implementing a robust risk management strategy and staying diligently informed about the latest developments in the industry.