For many Asian families, wealth is closely tied to businesses and other legacy assets built up over time. As they prepare to pass that wealth to the next generation and put more formal investment structures in place, managing those assets can become more complex.
The challenge can become more pressing when family members have different priorities, domiciles and risk appetites, while cross-border interests can add complexity to decision-making.
Families can also draw some lessons from institutional investors, which face a similar balancing act as they pursue long-term returns while meeting spending needs, liabilities and governance requirements.
Mr Prabhat Ojha, partner and head of Asia client business at global investment firm Cambridge Associates, said long-term investing for families and institutions requires more intentional choices, rather than relying on broad market gains or assuming diversification would work as it had in the past.
“Investors need portfolios that are resilient across multiple scenarios, including slower growth, stickier inflation, tighter liquidity and episodes of geopolitical or policy-driven volatility,” he said. “That means being disciplined about strategic asset allocation, but also realistic about how portfolios may behave under various stress scenarios.”
Cambridge Associates has more than US$600 billion (S$769 billion) in assets under management and advisement1 and more than 50 years of institutional investing experience. It builds customised portfolios for families and institutional clients, including endowments, foundations, insurance companies and governments.
EVERY PORTFOLIO IS UNIQUE
Mr Ojha said effective portfolio construction requires looking beyond an investment’s standalone appeal to consider its role in the broader portfolio.
Recent concerns about private credit did not mean its various sub-strategies no longer had a role in portfolios, he added. When accessed through suitable managers and allocated appropriately, private credit could still provide income, structural protections and diversification relative to traditional, duration-heavy fixed-income investments.
“When we work with clients on portfolio decisions, the question we ask is whether this is the right investment for this particular portfolio,” he added.
“Every portfolio that we build is bespoke and tailored to the client’s needs, so an opportunity that makes sense for one family or institution may be less appropriate for another, even if the underlying asset looks attractive on its own.”
Under what Cambridge Associates calls a structured enterprise review, the firm assesses a client’s portfolio against its objectives, risk tolerance, liquidity needs, possible stress scenarios and existing exposures.
Strategic asset allocation – the long-term mix of investments – then sets the client’s overall framework, while tactical asset allocation allows selective, shorter-term shifts when market dislocations or extreme valuations justify them.
DIVERSIFICATION TAKES DISCIPLINE
Effective diversification is a long-term discipline, requiring regular reviews of how a portfolio may perform under different economic and liquidity conditions and rebalancing to prevent unintended concentrations.
“A genuinely diversified portfolio is better positioned to preserve capital, remain invested through stress and compound capital more steadily,” said Mr Ojha.
Maintaining that discipline also depends on how investment decisions are made and carried out.
Mr Ojha said clients who want to retain decision-making authority can work with Cambridge Associates on an advisory basis, while those who prefer to delegate more investment decisions can use its outsourced chief investment officer or discretionary services.
For clients seeking specialist expertise in areas such as private investments or hedge funds, the firm also manages individual asset class mandates on a discretionary or non-discretionary basis.
Mr Ojha said such a framework could help families and institutions focus on broader priorities, whether supporting philanthropic initiatives, meeting spending needs or stewarding wealth across generations.
MANAGER SELECTION MATTERS
Mr Ojha said he sees opportunities in selected strategies, including private equity, private credit, venture capital, infrastructure, hybrid hedge fund vehicles, secondaries and co-investments. Outcomes can vary widely in these areas, he added, making manager selection particularly important.
“At Cambridge Associates, each manager needs to keep earning their place in the portfolio, and the case for continued investment should be tested against current opportunity set, team evolution, portfolio fit and the likelihood that their edge remains intact,” said Mr Ojha.
The firm tracks more than 12,000 fund managers and 45,000 funds2, with only about 5 per cent of those funds making it into client portfolios.
“Clients today are increasingly discerning,” said Mr Ojha. “They are looking for a trusted, long-term partner that can help them preserve and grow capital across market cycles and generations.”
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1 Assets under advisement include the portfolio values of clients of the firm and its affiliates that receive investment advice or management and performance reporting. In a limited number of instances, client portfolio values include assets for which Cambridge Associates is responsible only for reporting performance and has no investment advisory responsibility.
2 Funds tracked include private investment funds no longer or not yet open to new capital.
This content is for general information only and does not constitute financial advice or a recommendation to buy or sell any financial product. Readers should consider their individual circumstances and seek professional advice where appropriate. Cambridge Associates Asia is licensed by the Monetary Authority of Singapore to provide fund management services to institutional and accredited professional investors only; it does not hold client assets.