A New Breed of Imposter Is Targeting Singapore, Hong Kong's Ultra-Rich

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Reports of alleged imposters are cropping up more and more in the family office frenzy in Singapore and Hong Kong. The ultra wealthy use family offices to manage their finances and affairs.

Today on The Big Take Asia, host K. Oanh Ha speaks with Bloomberg investing reporter David Ramli about the secretive nature of the family office industry and why scammers are so hard to spot. Plus, she hears from Medway Investment board director Eric SayWei Neo about how people like him are becoming amateur detectives to try to weed out suspected imposters.

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Here is a lightly edited transcript of the conversation:

Oanh Ha: There’s been an explosion in the number of family offices opening up in Asian financial hubs like Singapore and Hong Kong. These are companies set up to help ultra-rich families manage their wealth.

David Ramli: You have everyone from James Dyson, the vacuum billionaire and tycoon, to even Ray Dalio, the hedge fund billionaire, whose ship was docked here in Singapore not too long ago.

Ha: David Ramli is Bloomberg’s investing reporter based in Singapore. And he says along with all this growth – something strange is happening in the family office world. He told us about an encounter that happened a couple of years ago – at a conference in Singapore. It involved Edoardo Collevecchio, who’s managing director of a family office called Oppenheimer Generations Asia. Now Collevecchio was getting ready to go on stage with other panelists to talk about their industry when he realized something was off about another panelist.

Ramli: He was just having small talk as you do with other panelists. One of the panelists was from a firm whose name he recognized because he'd done business with them before. So he asked them some very innocuous questions about the family principals, how they were doing, how are things, and the guy's face just drew a complete blank. He couldn't answer very simple questions about the principals, about the family.

Ha: So Collevecchio did some quick digging around – and it turned out that this person who was supposed to be representing this family office – had never even worked directly with the family office that he claimed to be a part of.

Ramli: In other words, the person had exaggerated, and managed to get so far with that exaggeration that they were about to go on stage at a conference in Singapore and speak on behalf of the family office.

Ha: And David says the legitimate people who work in this industry say they are seeing this kind of thing happen a lot lately.

Ramli: They're encountering more and more of these sort of fake or exaggerated family offices as they go out into the world and attend conferences and events. And in some cases they're even meeting people at government-hosted events that turned out to be a little bit not quite right.

Ha: And while it’s hard to say how many imposters are out there given the secretive nature of this industry, there is a lot of money at stake. Family offices manage trillions of dollars globally. And just recently in Singapore, 10 people were convicted in relation to a 2 billion dollar money laundering case. And one structure some of them used to hide the money? Family offices.

Ha: Welcome to the Big Take Asia from Bloomberg News. I’m Oanh Ha. Every week, we take you inside some of the world's biggest and most powerful economies, and the markets, tycoons and businesses that drive this ever-shifting region. Today on the show: a new breed of imposters in Asia’s family office business and how people in the wealth industry are getting creative to weed out the fakes.

Ha: When most people look for help to manage their money, they usually go to banks, perhaps hire brokers or consult with financial strategists. But for the ultra-wealthy, there are family offices.

Ramli: So a family office essentially is any kind of organization set up by a family or a person to look after their wealth, or even their just life affairs. Some people use the family offices to run assets like private jets or properties around the world. I know one family office that was responsible for everything from the philanthropy to the food, the restaurants that people would go to and get booked into.

Ha: How much money do you actually need to set up a family office?

Ramli: So this is a problem that we faced. The definition of a family office doesn't necessarily encompass a set amount of money. But when I first started looking at it here in Singapore, what I was told by various parties is the rule of thumb. And that rule of thumb is you really want to have liquid assets of at least a 100 to a 150 million US dollars because it costs 1 to 1.5 million US dollars each year to run a family office and therefore anything smaller than that is cheaper to use external service providers: lawyers, bankers, et cetera, to do all the things that you need them to do.

Ha: And this type of office is booming in Asia. David tells us part of the reason that's happening is that governments in this region are rolling out the red carpet for family offices, dishing out tax benefits to attract them.

Ramli: What you're seeing is it being used as almost as a buzzword for governments from Hong Kong to Singapore, and even in the Middle East, in the UAE to draw super wealthy families and their businesses. Because, as hedge funds and other investors start looking for family office money, governments also want family offices to come so that other investors in other parts of the finance sector also want to base there and turn that place into a hub. And ultimately, from Dubai to Abu Dhabi to Singapore and Hong Kong, everyone wants to be a massive finance hub for almost every category.

Ha: And so far this courting seems to be working.

Ramli: Family offices have traditionally been this very sleepy, boring part of the finance sector. It's not cool like hedge funds, right? You don't get TV shows on family offices. But recently, thanks to the rapid growth in Asia and thanks to the popularization of the term, it's suddenly become one of the hottest spaces to be in, globally, but especially in this part of the world. If you look at Singapore alone, for example, the number of family offices that have tax exemptions because they're family offices has grown from just 200 in 2019 to 1,400 as of 2023. And we're only talking about the number of family offices with tax exemptions registered at the Monetary Authority of Singapore.

Ha: And so it’s not hard to imagine why some people would be looking to lie or fake their way into a growing industry like that.

Ramli: When you have something that is suddenly so cool, you see it as this jewel on the hill and you really want to run towards it. You want to be part of it. You want to say, “Yes, I also work at a family office, or I have a family office.” You know one person compared it to joining a prestigious golf club. Now you might not even really enjoy golf, but you join up because you want to have some of that magic rub off onto you.

Ha: And David says one place where you can clearly see the advantages of being part of this exclusive circle is on the conference circuit.

Ramli: If you go to any of the conferences nowadays that are held in Singapore, Hong Kong and other places, there's always this differentiation in class, right? So if you say you're from a family office or you say you're from an institutional investor, you get in, no cost. You're eating the food for free. You're drinking the free wine and the sponsored dinners. And, importantly, you get there and you even get access to investor-only sessions, panels or events. So you're in the in crowd automatically as screened by the conference organizers. That's a very alluring thing for some people.

Ha: The conferences are one way for those who want access to the family office world to get their foot in the door. And that’s because this world is so hard to crack. It’s long been known for its secrecy.

Ramli: We're talking about an industry that, while it has certain circles and certain groups of people, you very rarely saw it getting put up on your LinkedIn as a workplace. You know, one example I have in the story is that Marie Young, who's the very highly regarded chief investment officer for the family office of Sergey Brin, who obviously co-founded Google. Her LinkedIn has simply said that she's from a Californian family office. There's no name. There's no details. The whole point of a family office is genuinely, you will almost never know who has a family office, if they're running it the right way.

Ha: But all this secrecy also means it can be really difficult to figure out who’s legit and who’s not.

Ramli: Because there is no definition for family office, technically speaking, are these people even lying? If they're exaggerating, that's a sort of different issue, right? But it makes the job of trying to ferret out exaggerators and fakers quite difficult, when combined with the fact that even the real players in family office are often so vague and vacuous in their LinkedIn profiles and their public personas.

Ha: After the break – we’ll hear the lengths that the wealth industry is going to, to ferret out the fakes.

Eric SayWei Neo: And when he started to share some snippets about the mismatch of information, each of us will also have an interaction with that same individual. And then it started to then, oh yes, now I understand why some of the info was somewhat on the gray area.

Ha: A growing industry with secrecy at its foundation makes it tough to catch imposters, and hard to know just how many bad actors there might be in the family office space. Another reason – a lack of regulation.

Ramli: If I were to open up a hedge fund or a venture capital firm, I would need to get a license and be regulated. But because family offices are theoretically an extension of ultra-high net worth, all I need to do to become a family office owner here in Singapore without technically lying is to register a corporate entity, label it as a family office in the backend, and that's it. If I wanted, however, to actually get the full benefits, be it an employment pass for my staff or a tax exemption for my gains, that's where I start to interface with more government agencies. And I need to get those exemptions approved. It's similar in most jurisdictions, but it means that if you go to London, New York, Singapore, Hong Kong, or Dubai, you can start a family office, just without those benefits.

Ha: So without clear ways to know who’s legitimate and who’s not those working in the family office space have resorted to figuring it out for themselves. And one place where this kind of amateur detective work is happening is on messaging groups like WeChat and Whatsapp set up by the community.

Ha: Hi there Eric, can you hear me?

Neo: Hi, yes loud and clear.

Ha: Eric SayWei Neo is a member of one of these groups. He’s board director of a family office called Medway Investments. And he told us of an experience he had with someone who said they represented a family office.

Neo: So how I first got acquainted with this person was through LinkedIn and subsequently we corresponded. It was very cordial. It was, it looks so normal, right? They talk like a family office, they would have similar mention of GP names, conferences that we do get invited to attend, they would have the same access, or even know the same organizer.

Ha: Neo says several members had interactions with this individual and then a member of the group shared a photo that raised a lot of questions.

Neo: So one of the, one of the community member, shared a screenshot of all the name cards that he had of that individual, representing different companies or family offices. I think it's about one, two, three, three, four name cards. And it was all within less than a year. And if you come from a family office or you work for a family, right, it’s quite rare that you change to different family offices, representing different families, within less than a year.

Ha: And there were other things that didn’t add up. Digging into their past, members of the group learned the individual had lied about their education and that some of the firms they claimed to have worked for didn’t even exist.

Neo: And that’s where I started to ask, “Which family office do you represent?” and “Who is the principal?” And the individual couldn't even give a name.

Ha: Eric, it sounds like you guys all put on your detective hats to investigate this person.

Neo: Correct yeah. Or you can call it CSI in terms of factual investigation.

Ha: Neo says the administrator kicked this individual out of the messaging group. And he says, if he and other family office professionals are tricked into sharing information with people who misrepresent their role, it could have a real cost.

Neo: We don't want to run into a risk of exposing unnecessarily critical, sensitive, private information, to someone that we thought was legitimate, right? To a private banker, we also don't share a lot of things, but from a principal to principal perspective, we do.

Ha: Neo says the community worries that the information they share in private could be used in unintended ways. And a recent high-profile case in Singapore has presented a real threat to the wealth sector’s reputation and put people like Neo more on guard.

Avril Hong: Unfolding scandal that has seen at least 10 people arrested in connection with this alleged money laundering case.

Ha: The 10 people who were convicted with crimes in that massive money laundering scandal in Singapore had links to at least five family offices among them. That’s according to documents reviewed by Bloomberg News and people familiar with the matter.

Neo: With many individuals that was caught, you know with different passports and everything. So it sort of tarnished the wealth industry to some extent. And so I think the interested parties that's really going full CSI on this, basically with the best interest to say, “Look, we want to maintain the integrity of the industry. We want to maintain the integrity of the family office people, whether you're professionals or principals yourself, let's help protect one another.”

Ha: Of course one path to possibly preventing fraud in this industry is regulation. I asked our reporter David, if more regulation could help weed out the bad actors.

Ramli: So needless to say, the people in this industry, both real and fake, are very wary of regulation. It's something that they don't think is necessary or welcomed. One point made by a gentleman from UBS is that the bigger the family office and the more money they have, the less these people would want to be on a register because they are so private in both the cases of real family offices and the case of fake or exaggerated family offices. We are, however, seeing, some jurisdictions like Singapore, starting to see certain places get stricter, trying to differentiate between the more real family offices and the faker family offices. So everything from the annual report that family offices need to supply to the Monetary Authority of Singapore in order to continue qualifying from tax exemptions, that's getting more stringent and more difficult. In fact, the most recent version I've seen specifically asks family offices if they have either been charged with or found guilty of money laundering, or terrorism financing, not just in Singapore, but any jurisdiction.

Ha: A spokesperson for the Monetary Authority of Singapore told Bloomberg that potential money laundering is the key risk linked to wealth inflows from family offices. And to address that, Singaporean authorities are ramping up scrutiny of family offices and demanding more disclosures from them. But David says the secrecy that makes it easier for bad actors to operate isn’t going away anytime soon.

Ramli: I think any industry where you have limited regulation and you have maximum interest combined with huge fund flows is always going to be ripe for good and bad actors. And this is not different from that. To be rich is glorious, part of that glory comes with being quiet when you want to be quiet and loud when you want to be loud.

This episode was produced by: Yang Yang, Jessica Beck, Thomas Lu and Naomi Ng; Senior Producers: Naomi Shavin and Kim Gittleson; Editors: Caitlin Kenney, Claire Ballentine and Brian Chappatta; Senior Editor: Elisabeth Ponsot. Executive Producer: Nicole Beemsterboer; Sound Design/Engineer: Blake Maples; Fact-checker: Adriana Tapia.

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