Shirley Crystal Chua
CEO and Founder
Golden Equator Group
Q. What is your business model?
We have developed three distinct areas since we were founded in 2012.
The first is the financial institution component, which includes our wealth business, fund management and a fintech platform for personal finance management called ‘Asia Finance’.
The second area of the business is consulting. We serve three groups: early start-ups, high-growth-stage companies and traditional businesses. We help them learn, grow and connect, and there’s a lot of focus on using digital strategy. We are creating a platform under the consulting arm as well that will help these businesses make better decisions for penetration around the region.
The third area is ecosystem and community building: that’s why we started SPECTRUM, to bring together relevant parties. We have a focus on high-growth companies, and their main focus is to grow out of Singapore and into the rest of the region.
Q. Let’s talk about the multi-family office (MFO) business. What’s your target clientele?
Our target market is the $100 million-$600 million net worth families.
Q. How big is the team?
Including the operations team, wealth managers and investment specialists, we have 16 people for our MFO business, Golden Equator Wealth. This includes 10 wealth managers and portfolio specialists. We are looking to grow this because we are placing a lot of emphasis on building infrastructure for strong growth.
Q. What are some new services you’re venturing into?
We believe in technology and in educating the next generation. Whether it is an investment or the things we create, we think about how it can be impactful for the future rather than right now. Aligned with that, we have launched a ‘next gen’ programme for the family offices, where we bring in members of the families that we manage.
We also now help the families formulate their family legacy books, which is very important for Asian families. We are developing an app that the family can use to record its history and pass it down through the generations and we are releasing a white paper on Asian MFOs.
We bring the next generation into our system and train them either to manage wealth or explain how fintech works. They can also be attached to our fund management team or they can incubate a project themselves.
Q. How do you charge clients?
We charge them a fixed fee depending on the kind of assets that needs to be managed, how intense it is going to be, and the assets under management parked with us. The industry standard ranges from 1% to 2%. Also, in aligning interests, it makes sense for families to incentivise the managers to do well, so there is a performance fee.
Q. What percentage of client assets are in in-house funds and what products and asset classes are you recommending?
We don’t launch funds that are already popular and out there in the banks. We currently have four Golden Equator funds: two venture funds, a property development fund and a prime currency fund. The currency fund manages the liquidity of our clients and generates 7-8% returns on a yearly basis.
This year, we are also looking at launching private capital funds in the mezzanine funding space. Similarly, we are also looking to go into blockchain and crypto because we feel that there is depth there. We are formulating the investment thesis behind that.
Less than 10% of our clients’ assets are in such funds.
We are developing an app that the family can use to record its history and pass it down through the generations and we are releasing a white paper on Asian MFOsShirley Crystal Chua
Q. What’s the growth strategy for the MFO business?
We are targeting $1 billion in assets under management by the end of the year. We are also definitely going to look for more partnerships with maybe other MFO in Europe and Australia so that we can cross-learn and create opportunities for the families as well.
We are talking to parties in Australia right now. The plan for 2019 and 2020 is to bring Asian opportunities to European and Australian family offices.
Q. How has the MFO industry changed in the past five years?
The industry is starting to understand the MFO proposition better. We have noticed a very clear trend that a lot more private bankers want to move into this space. Clients are becoming more familiar with the concept as well.
We want more industry players, so that it will create more service offerings, traction and education as well.
Q. What are the new challenges facing the industry today?
Smaller MFOs will probably face the challenge of administrative costs. These costs are affected by policy changes – especially from regulators – and competition from the banks. Some banks offer family office desks as well, so that is a clear competition for the smaller players.
In each market, there will eventually be a few big players.
Q. What are some new regulations you’re watching at the moment?
In the past two years, everybody has been talking about Common Reporting Standards, and they have started settling down now. The intention is good, but as it is a massive effort, it is new to everyone, and there’s a huge volume of data, there’s likely to be a lot of duplicated reporting. Therefore, everyone is watching the development to see how the data will be managed and used.
On the fund management side, the government has been promoting venture funds since 2011, but once you have more venture funds and they raise money as a business, they have to be regulated in a way that is commensurate with their scale. That’s why the Monetary Authority of Singapore has consulted with the industry and formulated a new licensing regime tailored to venture funds.
Of course, the other one is crypto. They are still figuring it out because it is just not easy to understand for some people. Crypto is supposed to be very decentralised and non-controlled, but at the same time how do the governments provide enough comfort for the industry?
Q. What is the most unusual request you’ve received from a client?
Our clients are pretty traditional. We are more likely to suggest unusual things to them than the other way around! For example, if they have a grandchild born in 2015, we ask them to consider buying a barrel of wine of 2015 vintage, bottling it and keeping it for the child’s 18th birthday.