Topaz Family Office, a Hong Kong-based advisory firm, is urging family offices to pivot away from US assets and reallocate investments toward markets such as Japan, Australia, and the United Arab Emirates. This shift comes in response to escalating global tariff tensions initiated by the United States, which have negatively impacted its economy and could signal a more challenging domestic business climate. CEO Jim Kwok, who also serves as vice-chairman of the Family Office Association Hong Kong, emphasized that this is a pivotal time for major asset allocators to reduce exposure to US equities and Treasuries to achieve a more favorable risk-return balance.
According to a Citigroup survey, 60% of family office assets remain concentrated in the US and North America, an increase from 57% the previous year. In contrast, Europe and Asia-Pacific excluding China accounted for only 16% and 12%, respectively. In light of this, Topaz has adopted a more defensive and diversified strategy, reducing its US exposure from 52% to 34% since the first half of 2023. Simultaneously, the firm has increased investments in China, Japan, broader Asia-Pacific markets, and in commodities and precious metals.
Kwok explained that Topaz closely monitors market signals and gradually adjusts its asset allocation. For instance, the firm divested from Tesla due to concerns about Elon Musk’s growing political involvement, suggesting it could detract from his leadership of the company. Tesla’s stock has dropped 30% this year. In the tech and AI space, Topaz believes the market is shifting away from US-centric companies, and countries like China could outperform due to demographic advantages.
Topaz sees strong potential in Japan’s hospitality sector, supported by booming tourism and a weak yen. The firm has already developed a block of Airbnb properties in Osaka and plans to continue investing in the Kansai region through 2025, viewing Japanese real estate as undervalued relative to US assets.
Australia’s healthcare sector has also caught Topaz’s interest. The firm plans to develop medical centres in what it views as a stable, well-supported industry. In Hong Kong, the firm remains confident in residential property and is active in private credit lending, benefiting from favorable loan-to-value ratios and attractive interest rates.
Topaz is also exploring opportunities in the UAE’s real estate market, especially in Abu Dhabi and Dubai, where strong GDP, a young population, and rising rental yields offer upside potential. By engaging with stakeholders in the UAE and Saudi Arabia, Topaz aims to build relationships and gain deeper insights into emerging property trends.
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