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Asia’s Wealthy Are Defying Taboos to Invest in the Business of Death

David Ramli and Ishika Mookerjee

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When Ang Ziqian was seven, his teacher asked the class to describe their parents’ jobs. The children of nurses, lawyers and policemen were applauded, but Ang’s response was met with shaming silence. Such was the lot of funeral directors.

“At recess the next day, a girl came to me and said ‘I want to be friends with you, but my family said we must stay apart so you don’t transfer your bad fortune’,” Ang, now 38, said. “From that point on, I didn’t have many friends and those I had were mainly non-Chinese.”

The business of death and dying has long been taboo across much of Asia; cemeteries and nursing homes near residential areas are shunned, while investors attract gossip. But a rising pool of wealthy Asian families and philanthropists are defying social norms, boosting investments and educational campaigns to improve and destigmatize the industry.

In a region where the population is getting older and richer, it’s a potentially lucrative bet. By 2030, Southeast Asia will have 163 million middle-class households, research from the McKinsey Global Institute shows. By 2050, almost one-quarter of people in Southeast and East Asia will be 65 years or older.

Flying Home

In Singapore, Toa Payoh Industrial Park sits alongside the nation’s busy Central Expressway. Its cracked driveways and terraced garages mainly house businesses like mechanics and paint shops. But down one avenue is a row of workshops that service the dead; hearses are filled with flowers while caskets lie in state ready for their final journey.

It’s here that fourth-generation funeral service provider Ang has one of his businesses, Flying Home Pte. Walk through the opaque glass doors and the grind of Toa Payoh falls away.

With its pale green walls, skylights and high ceilings, Flying Home feels more like a modern-day chapel, if it wasn’t for the hidden embalming room. Biodegradable vessels for ashes sit next to pamphlets on turning loved ones into memorial diamonds.

Singaporeans traditionally held everything from weddings to funerals on the open air ‘void decks’ of public housing estates. As family units have shrunk and become wealthier, there’s demand for a more bespoke approach. Ang said the broader group, Ang Chin Moh Funeral Directors, has grown on average 5% a year.

Hedge Funds

Death is proving lucrative in less conventional ways, too. Life settlements, sometimes known as death bonds, are also finding favor among Asia’s wealthy.

Life-insurance companies typically offer customers a lump sum to relinquish their policy once they pass a certain age. Insurers save money because the policy never has to be paid out, while clients can spend the cash they would have otherwise paid on premiums before they die.

Enter the hedge fund. By offering customers more cash than insurance firms, they take over the payment of premiums and become the ultimate beneficiary. Once the person dies, the hedge fund gets paid, so long as families cooperate and life-insurance companies don’t find an exit clause. (There’s also the risk that actuarial tables may change, radically shifting a policy’s value.)

While it’s hard for some to shake the ick factor -- the faster people die, the bigger a hedge fund’s profit -- family offices and large institutional investors, notably Apollo Global Management Inc., have been increasing their exposure.

The appeal is returns that aren’t correlated to the global economy because death, like taxes, is certain. Investors in Asia have been slower to jump in versus their American and European peers -- until now.

Singapore-based multifamily office Kamet Capital Partners Pte committed $100 million last year to a European manager of U.S. life settlements. Chief Executive Officer Kerry Goh said his clients, who largely hail from mainland China, were initially hesitant but quickly warmed to the idea when shown the returns history.

Demand has become so strong that Kamet Capital is considering accepting external money. Singapore is even becoming a popular roadshow stop for life-settlement funds looking for backers.

“Markets go up, markets go down, economies rise, recessions hit -- this doesn’t get affected because people die, right?,” Goh said. “We’re not causing death because death comes naturally but we are benefiting the insured so they get fair price discovery.”

Third Generation

That’s not to say that rare events like natural disasters or the recent Covid-19 outbreak, which can cause an upsurge in unexpected deaths, leads to added profit for businesses investing in the end of life. Funeral parlors, for example, have to ramp up costs and quarantine their teams taking care of the deceased.

For Singapore’s Tsao clan, which made its fortune in shipping and property, taking the sting out of aging and death has been in the family for three generations.

At 86, Tsao Ng Yu Shun, an entrepreneur in her own right, established the Tsao Foundation to offer services for the elderly. Since 1993, it’s expanded to include a community center in central Singapore, aged-care training and home visit services. Tsao passed away in 2001 and the foundation is now led by her granddaughter Mary Ann.

The foundation charges for some of its services, but sustainability rather than profitability is the goal. The Tsao family office, which funds the foundation, makes investments across asset classes within an ESG framework and the aims of both entities can coincide.

“We’re typically interested in education, health care, aging, longevity and then a few other things,” the younger Tsao said of the family office’s broader investments. When it comes to palliative and hospice care, Tsao isn’t aware of many for-profits but said if such investments come up “and we think it’s appropriate, we’re totally not against it.”

Because the foundation favors community centers for the elderly and allowing people to age at home, it doesn’t back nursing facilities. But it’s in contact with some of the same stakeholders so it understands the hurdles.

“People give all sorts of weird reasons, like that ghosts would come into their house,” the foundation’s clinical affairs chief Ng Wai Chong said of one residential campaign against a nursing home. “Socially there’s a lot of stigma around hospices and funeral parlors because people think it affects property prices.”

Shifting Attitudes

The result has been slow growth in aged-care facilities. Singapore had 15,205 nursing-home beds at the end of 2018, Ministry of Health data show. Similarly populated Sydney had more than 72,000 as of mid-2019.

It’s an issue that resonates across the region. Whereas the U.K. has about 44 beds per 1,000 people over 65, South Korea and Japan each have around 24, according to OECD data.

Tsao said efforts to educate locals and gain grassroot support are key to getting community approval for projects. Over time, attitudes toward death and dying have improved.

“Older people aren’t so uncomfortable and appreciate a proper opportunity to talk about it,” she said. “My father and mother had very different takes about how they wanted to live their last days but they were okay” discussing it.

That increasing acceptance is driving the transformation of once-shunned industries.

Showers, changing rooms and wireless internet might not seem important at a funeral parlor, but Ang says upgrades like those have helped attract the next generation of clients and employees. In 2004, Flying Home used to get about five resumes a year; now Ang reckons he’d get that every month.

The family is also looking further afield, exploring ways to enter the Japanese market and becoming a distributor of advanced equipment such as mortuary hoists and embalming supplies.

Family offices are particularly interested in funding the sector and eventually Ang would like to list part of the business. An initial public offering would be a far cry from the small boy standing quiet and ashamed in a classroom.

“The attitude has changed a lot,” he said. “Because I went through this social stigma, it’s given me the drive, the energy to change how people should perceive death and dying.”

--With assistance from Joyce Koh.

To contact the reporters on this story: David Ramli in Singapore at dramli1@bloomberg.net;Ishika Mookerjee in Singapore at imookerjee@bloomberg.net

To contact the editors responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net, Peter Vercoe

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