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Why billionaires are setting up family offices in Singapore
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Why billionaires are setting up family offices in Singapore

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Asia’s billionaires are getting ready to hand over to the next generation, and Singapore is benefiting from the rush to set up new or satellite family offices with an increased focus on philanthropy and impact investing.

In recent months, Horizon Ventures, a private investment firm associated with Hong Kong billionaire Li Ka-shing opened an outpost in Singapore.* Oppenheimer Generations, the family office of former De Beers chairman Nicky Oppenheimer, is also in Singapore while Bridgewater Associates founder Ray Dalio and Google co-founder Sergey Brin both set up shop in late 2020.

Singapore’s Economic Development Board is doing everything in its power to reel them in. It has enlisted the private banking sector to help family offices’ interest in philanthropy and impact investing, which seeks to generate a social or environmental impact as well as a financial return.

Two years ago, the Singapore government introduced variable capital companies (VCC), fund management vehicles with tax incentives and other benefits. These are appealing for family offices, particularly those with an interest in changing the world.

“Philanthropy is the new black in Asia,” said one private banker who advises the wealthy. “Singapore prides itself on being a financial hub and to keep that reputation, it needs to set the pace on new trends like green investing and impact investing.”

Asia is behind Europe and the United States, where philanthropy has long been a business that’s expected to generate measurable returns and the likes of the Bill and Melinda Gates Foundation have pioneered impact investing.

This is likely to shift with the looming generational change in wealth, said Peter Golovsky, managing director and head of family office services, Asia Pacific, at Alvarium, a global multi-family office.

“Some 85 per cent of Asia’s billionaires are first-generation wealth creators, founders of family businesses.

“Their average age is 65, so they are looking at succession strategies. Family office allocations in impact investments sit at around 12 per cent, but we expect that to double in the next few years, and it will be driven by the next generation.

“Singapore has attracted a lot of wealth through structures like VCCs and other tax incentives, including residency options and paths to citizenship.

“As global families and entrepreneurs, including philanthropists, think about where they want to set up and run their businesses, and where they want to live, I think there will be another step up,” he said.

One measure of interest in social investing is a sold-out conference on the topic, organised by industry group AVPN, that kicks off next Tuesday in Bali.

Despite this increased interest, impact investing structures have a long way to go, according to Mette Ekeroth, managing director and group head of philanthropy at the North-East Family Office, who will be at the conference.

NEFO was established by the founders of the Pandora jewellery brand, Winnie Liljeborg and Per Algot Enevoldsen, in Denmark in 2013. They opened a Singapore office three years later.

“Regulatory systems all over the world treat philanthropy and investment as very, very separate. Now everyone is realising there is an area between these two categories where a lot of the solutions lie to the problems the world faces,” Ms Ekeroth said.

“I have faith that Singapore is going to be the place that comes up with the structures we need. The authorities are engaging and consulting as they work multiple angles to try and address the gaps. We’ve seen in the past that when Singapore really wants to develop an ecosystem, it does, and it does it at high speed.”

*Clarification: After this story was published, CK Asset Holdings has advised Horizons Ventures is owned by Ms Solina Chau. Mr Li has collaborated with the firm on technology projects.

This article was originally published in The Australian Financial Review here.

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The Law Gazette – Make Giving Better: The Role of the Community Foundation of Singapore

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Asia’s billionaires are getting ready to hand over to the next generation, and Singapore is benefiting from the rush to set up new or satellite family offices with an increased focus on philanthropy and impact investing.

In recent months, Horizon Ventures, a private investment firm associated with Hong Kong billionaire Li Ka-shing opened an outpost in Singapore.* Oppenheimer Generations, the family office of former De Beers chairman Nicky Oppenheimer, is also in Singapore while Bridgewater Associates founder Ray Dalio and Google co-founder Sergey Brin both set up shop in late 2020.

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Events

CFS Change Matters Series: Mens, Manus and Machina – How AI Empowers People, Institutions & the City in Singapore

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Artificial intelligence (AI) will be a disruptive influence on society, for good as well as ill – and there is a duty to provide a sense of hope, upfront, that humans will be able to prevail.

That was the core message of the inaugural CFS Change Matters Series talk, “Mens, Manus and Machina – How AI Empowers People, Institutions & the City in Singapore”. It was delivered on 21 June 2023 by Professor Jinhua Zhao, Associate Professor of Transportation and City Planning at the Massachusetts Institute of Technology (MIT).

“Mens”, “manus” and “machina” are Latin for “mind”, “hand”, and “machine” respectively, and the title plays on MIT’s motto, “mens et manus”. The title of the talk is also the name of a multi-disciplinary collaborative project between MIT and Singapore’s National Research Foundation. The collaboration is co-led by Prof Zhao, and aims to address the following questions:

  1. How will we design technology and train humans to build the skills and habits for human success in a robotics-heavy environment?
  2. How will we adapt our social and business institutions to create the incentives and protections for innovation and human welfare?

In his talk, Prof Zhao shared four key insights into AI.

1. AI will transform, rather than reduce, demand for workers

Enablement, not elimination, of workers

The aftermath of the Industrial Revolution (1760-1840) saw the rise of the machine, leading to a major change in the way we worked. This did not, however, reduce overall demand for workers.

Citing economist James Bessen, 1 Prof Zhao noted that the number of ATMs in the USA grew rapidly from the 1970s, when the first ATMs were installed in banks. However, the role of the bank teller was not eliminated, but enabled. Bank tellers now focused on value-added services centered on human interactions, which could not be replaced by ATMs. As such, the number of bank tellers increased.

Employment grows along with automation

While automation has led to displacement and job loss, there has historically not been a fall in overall employment. Increased productivity from automation, as well as the growth of new human desires over time, have created entirely new jobs and industries.

This has led to an overall increase in employment; in fact, the 2018 US Census counted that more than 60% of jobs in 2018 had not yet been “invented” in 1940.

2. AI is not all the same

Expert versus Learning Systems

AI systems generally fall into two categories: expert systems and learning systems.

  • Expert systems rely on predefined rules and a knowledge base to mimic the expertise of specialists.
  • Learning systems, such as machine learning, mimic the way the brain learns and processes information.

Discriminative versus Generative Models

In addition, AI systems mainly adopt either a discriminative or a generative model in relation to their inputs.

  • Discriminative models classify or discriminate between different inputs, based on their features.
  • Generative models learn the patterns and relationships within the data input to generate new samples that resemble the original data.

The ubiquitous ChatGPT, for example, is a Large Language Model, an example of a generative model AI that can produce human-like chat responses.

3. The real impacts of AI on society

AI will replace white-collar jobs, not blue-collar jobs

While the Industrial Revolution replaced manual workers, AI’s superior analytic and generative skills enable it to replace white-collar jobs like office workers and scientists.

For example, a Google-developed AI known as AlphaFold was able to significantly outperform human scientists in the field of protein structure prediction – a feat normally requiring decades of expertise from humans.

As such, it is “highly skilled” white-collar jobs that may be at risk from AI – a concerning proposition for developed economies that depend heavily on these jobs.

The response of social institutions will determine the impacts of AI

The impact of AI does not occur in a vacuum. Tapping the beneficial impacts of AI on living standards depends on how successfully social institutions can take advantage of it. For example, society must continue to be responsible for providing financial safety nets for those displaced by AI, and for caring for seniors who may find it harder to adapt.

These institutions must also respond to not just the economic challenges, but the social challenges of AI. Citing the intellectual Yuval Noah Harari, Prof Zhao noted that generative AI, for example, could destroy the ability for people to have meaningful conversations – and undermine democracy in the process.2

4. Science, government, and individuals can respond to AI productively

Science can help us control AI

Science must solve the alignment problem3 in order to develop beneficial AI – which takes only actions that achieve human objectives and preferences. Otherwise, AI could unintentionally act in a way that is destructive and harmful to humanity.

Governments can educate humans to fill areas that AI cannot

While AI is powerful, it is not superior to humans in all areas. Humans are better than AI at:

  • Creativity: being able to apply knowledge from one area to another area
  • Dexterity: tasks involving manual dexterity
  • Social intelligence: conducting “social negotiations” with humans, such as knowing when it is safe to turn while driving
  • Long-term planning: being able to break long-term plans (e.g. a 5-year plan) into shorter increments

With that in mind, governments should focus education on creativity and communication, as well as critical thinking: the ability to judge, and to ask the right questions. This prepares students to become evaluators, directors and planners, instructing AI to act on their goals.

The role of teachers will also change as AI evolves and becomes deployable at scale as an individual, customized teaching assistant. AI will enhance students’ learning and help teachers understand students; teachers will be tasked with socially engaging, empathizing with, and supervising students, rather than merely delivering content.

Individuals can change their mindsets to be resilient in the face of AI

Finally, the impact of AI, and job displacement, on individuals will not purely be economic. It will be personal as well, given how central work is to our social and emotional lives, and to our sense of purpose.

Individuals can make the following mindset changes, in order to be resilient:

  • Adopting a lifelong learning mindset: this means developing new skills while working, rather than focusing on academic learning as preparation for work.
  • Adopting a flexible mindset: understanding that while change is the new normal, humans have always had the capacity to adapt. This is especially important for youths.

Final thoughts: how philanthropy can respond to AI

Philanthropists reading this may wonder: how do I respond to the challenges posed by AI? CFS is Singapore’s first community foundation, with 15 years of experience and a network of over 400 charity partners. We leverage our experience and grantmaking expertise to identify and evaluate key opportunities for individual and corporate donors to make greater impact.

We think the following giving approaches may be valuable to respond to AI:

  • Supporting seniors to age well in the community, so they remain cared for and are not left behind.
  • Enabling youths to access quality education, through schools and Institutions of Higher Learning, and prepare for the AI-empowered future.
  • Funding efforts to improve employability, so that individuals develop the skills they need to keep working.
  • Ensuring that mental wellbeing is supported, to help individuals build the resilience to cope with changes.
  • Tackling climate and environment issues, to mitigate and adapt to this additional source of negative disruption.

To find out more about CFS and our leading role in Singapore’s philanthropy ecosystem, please click here.

CFS would like to extend our heartfelt gratitude to our donors Oliver Kwan and Helen He from the Evergreen Changemaker Fund for their invaluable support and extending the invitation to Prof Zhao, which made this event possible.

References

1 Bessen, James. “Toil and Technology.” Finance & Development 52, no. 1 (March 2015): 16–19. https://www.imf.org/external/pubs/ft/fandd/2015/03/pdf/bessen.pdf.

2 “Yuval Noah Harari Argues That AI Has Hacked the Operating System of Human Civilisation,” The Economist, April 28, 2023, https://www.economist.com/by-invitation/2023/04/28/yuval-noah-harari-argues-that-ai-has-hacked-the-operating-system-of-human-civilisation.

3 The problem of aligning AI with humans’ objectives and values.

The competition was organised by City Harvest Community Services Association and received support from FUN! Fund, a Community Impact Fund jointly established by the Community Foundation of Singapore and the Agency for Integrated Care, with the aim of addressing social isolation among the elderly.

Senior Minister of State, Ministry of Communications and Information & Ministry of National Development Mr Tan Kiat How attended the event. He encouraged the elderly to stay physically and mentally well, as well as urging them to participate in community activities and enjoy their golden years together.

Learn more about FUN! Fund at https://www.cf.org.sg/fun-fund/.

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Sayang Sayang Fund: new initiatives

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The Community Foundation of Singapore today gave an update on the fund raising efforts for the Sayang Sayang Fund (SSF) and announced new initiatives that the Fund will support. One of these initiatives is an extension of the previously announced SeniorsOK@Home programme – CapitaLand #LoveOurSeniors – in collaboration with the Agency for Integrated Care (AIC). CapitaLand Hope Foundation will be donating $700,000 towards this new programme. This will be on top of the $3 million goal CFS has set earlier.

Todate, SSF has received $1.1 million in donations and pledges of about $1 million. The Fund is still a distance away from the goal it set for end April. As the COVID-19 pandemic escalates, there are new needs emerging from the community and the funds raised will allow the Sayang Sayang Fund to address emerging needs quickly.

Chief Executive Officer of the Community Foundation of Singapore, Ms Catherine Loh, said, “Singaporeans have been very generous and we are so touched and grateful that many donors – individuals and corporates — have come forward to donate when they hear about the Fund. I would like to encourage everyone else to come together and support the Sayang Sayang Fund, to meet the gaps in the community.

UPDATE ON INITIATIVES

1. SeniorsOK@Home
SeniorOK@Home will provide for immediate aid like food, necessities and medical supplies to seniors with limited mobility and confined at home. It also provides for digital solutions, such as video conferencing, and online recreational activities for seniors at home, to minimise social isolation. For centre-based charities who are providing essential services, CFS is funding disinfection and sanitisation of premises, as well as additional manpower to maintain the standard and quality of care for the seniors.

2. CapitaLand #LoveOurSeniors
With the rise of cases from nursing homes, the Sayang Sayang Fund has curated an extension to SeniorsOK@Home – the CapitaLand #LoveOurSeniors. CapitaLand Hope Foundation will be donating $700,000 towards this new programme, which will support community care providers with personal protection equipment and disinfection of the premises if there is a confirmed case of COVID-19. The contribution will also go towards a preparedness fund: to keep the vulnerable seniors engaged, as well as to appreciate the hard work and dedication of community care staff. AIC will be executing the programme.

3. SafeSleep@Home
Given the rapid increase in cases, there is also urgent concern for the rough sleepers in Singapore. The 2019 homeless survey published by the Lee Kuan Yew School of Public Policy indicated that there are about 1,000 homeless persons living in the streets. They are now all at-risk and need to find immediate shelter during the circuit breaker. SafeSleep@Home is an initiative to aid 500 rough sleepers find temporary lodgings, daily necessities and food supplies.

About Sayang Sayang Fund

The Fund provides care and support for vulnerable communities impacted by the COVID-19 pandemic. By convening the community and acting together, the Fund can help community partners move their essential work forward in this critical moment and support the individuals and families hit hardest by the impacts of COVID-19 and associated containment efforts.

The additional $3.7 million the Fund hopes to raise will support local charities and non-profits whose programmes and proposals meet three key objectives:

1. Provide emergency response funds that enable immediate and short-term relief for individuals and families from marginalised communities adversely affected by the COVID-19 situation.
2. Provide innovation solutions and research that address current and emerging needs to combat the COVID-19 situation.
3. Build capabilities for charitable organisations so that their clients can continue to access essential support and assistance during the COVID-19 situation.

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The competition was organised by City Harvest Community Services Association and received support from FUN! Fund, a Community Impact Fund jointly established by the Community Foundation of Singapore and the Agency for Integrated Care, with the aim of addressing social isolation among the elderly.

Senior Minister of State, Ministry of Communications and Information & Ministry of National Development Mr Tan Kiat How attended the event. He encouraged the elderly to stay physically and mentally well, as well as urging them to participate in community activities and enjoy their golden years together.

Learn more about FUN! Fund at https://www.cf.org.sg/fun-fund/.

 

The programme provides the children with a non-threatening platform to connect with peers and have positive conversations. In addition, it exposes them to different people who can assist to broaden their perspectives.

L.S., a volunteer with the Reading Odyssey programme @ Spooner Road

中心“常胜将军”胡锦盛:比赛限时反应要快

现年92岁的胡锦盛是最年长的参赛者。自2017年退休后,他几乎每天都到活跃乐龄中心报到,从此爱上了玩拉密,每次可玩上三个小时,在中心是“常胜将军”。

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Events

Partnership with the Asia Philanthropy Circle: The pitch for social inclusivity

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By Genevieve Ding of APC

On 10 January 2019, the Asia Philanthropy Circle (APC) convened a Singapore roundtable on the topic of ‘Inequality’. This time, to spur dialogue to action, APC, in partnership with the Community Foundation of Singapore (CFS), selected three intervention initiatives which aim to promote social inclusivity in Singapore, and organised a pitch session to invite member partnership and funding of these projects.

Members were presented with a proposed primary research to establish living income benchmark, an integrated programme supporting disadvantaged children and a collective impact model that addresses youth unemployment.

This event is a follow-up from a roundtable in 2018 exploring the state of inequality in Singapore, with Assoc. Prof Teo You Yenn from Nanyang Technological University, discussing the lessons from her bestselling book, ‘This is what Inequality Looks Like’. In the book, Assoc. Prof Teo eloquently gives voice to the realities of unequal life circumstances in Singapore. To further unveil the lived realities of Singaporeans at all levels of society, Assoc. Prof Teo, together with Asst. Prof Ng Kok Hoe from the National University of Singapore, presented their proposed study on the budgets that different types of household need for a basic standard of living in Singapore. Their study would inform a benchmark of how much people need in order to live adequately, which could guide the planning of welfare schemes in Singapore.

On the topic of inclusive education, Ms Ng Kar Yee from the People’s Association and Ms Wu Meiling from SHINE Children and Youth Services presented their holistic education model for children from disadvantaged families. In Singapore, education has high aspirations as a social leveller but stumbles in the face of an uneven playing field. The presenters highlight the lack of collaborative approach from organisations to provide holistic, integrated care for primary school children. The Integrated Care Programme that they have been running aims to create a child-centric ecosystem of care for at-risk children.

The pitch session ended with the presentation of a collective impact initiative – the Singapore Youth Impact Collective – to improve the work-readiness of disadvantaged young people through skills development and vocational training. Representing CFS, which has taken on the project as the backbone organisation, Ms Joyce Teo shared that youths at-risk make up approximately 17% of the total population in Singapore. Significantly, those in the low income brackets have the least educational pathways, and young people from disadvantaged socioeconomic backgrounds find it very challenging to find employment with promises of job stability and upward career progression.

In his concluding remarks, Mr Laurence Lien, APC CEO and CFS Chairman shared the sentiment behind hosting the pitch session at the Community Foundation of Singapore. The vision of CFS is for the community to take initiative and lead efficacious ground-up interventions. Mr Lien emphasised that a community of supporters sends a much stronger message for social intervention. He explained that while the exit strategy of most initiatives is for the government to adopt large-scale intervention, there is a need for philanthropists to first try new, innovative models and blaze paths not ventured by the government. Philanthropy needs to explore and show new ways of doing things.

Members who are interested to know more are encouraged to either approach the organisations directly or contact APC to coordinate further follow up: membership@asiaphilanthropycircle.org

This article was originally published on Asia Philanthropy Circle’s newsletter at: http://www.asiaphilanthropycircle.org/singapore-roundtable-the-pitch-for-social-inclusivity/

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.Lorem ipsum dolor sit amet consectetur adipiscing elit dolor

The competition was organised by City Harvest Community Services Association and received support from FUN! Fund, a Community Impact Fund jointly established by the Community Foundation of Singapore and the Agency for Integrated Care, with the aim of addressing social isolation among the elderly.

Senior Minister of State, Ministry of Communications and Information & Ministry of National Development Mr Tan Kiat How attended the event. He encouraged the elderly to stay physically and mentally well, as well as urging them to participate in community activities and enjoy their golden years together.

Learn more about FUN! Fund at https://www.cf.org.sg/fun-fund/.

 

The programme provides the children with a non-threatening platform to connect with peers and have positive conversations. In addition, it exposes them to different people who can assist to broaden their perspectives.

L.S., a volunteer with the Reading Odyssey programme @ Spooner Road

中心“常胜将军”胡锦盛:比赛限时反应要快

现年92岁的胡锦盛是最年长的参赛者。自2017年退休后,他几乎每天都到活跃乐龄中心报到,从此爱上了玩拉密,每次可玩上三个小时,在中心是“常胜将军”。

Picture of admin bluecube
admin bluecube

Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book.

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