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HSBC In Singapore Targets Independent Asset Manager Space
Tom Burroughes
17 December 2020
in Singapore has launched a dedicated independent asset management desk to serve family offices and independent advisors, highlighting the growing clout of these business segments in the Asian city-state and surrounding region. The bank went on to say that “capturing the massive opportunity from Asia’s fast-growing wealth creation and what is expected to be among the world’s biggest intergenerational wealth transfer events is core to HSBC Group’s strategic pivot to Asia.” Under the VCC structure, fund managers can constitute investment funds as VCCs across traditional and alternative strategies, and as open-ended or closed-end funds. Fund managers may also incorporate new VCCs or re-domicile their existing investment funds with comparable structures by transferring their registration to Singapore as VCCs.
This news service has asked HSBC who will lead the EAM team, and may update in due course.
“Increasingly UHNW clients appoint IAMs to oversee their wealth assets who in turn partner with private banks in delivering wealth investment advisory and execution. The IAM industry is a rapidly growing sector in wealth management and growing client awareness and demand for independent advisory services will continue to spur the development of specialised IAM advisors,” the bank said in a statement yesterday.
Citing media research, HSBC said that there are 160 IAMs in Hong Kong and Singapore, managing about $91.5 billion of AuM, a market share of 5.5 per cent – still relatively small but with potentially large upside.
“A dedicated IAM desk enables us to expand our reach into this fast-growing segment. Clients increasingly have more options and by establishing this desk, we are supporting them in their wealth ambition with capabilities underpinned by our international footprint and full private banking suite of capabilities at scale,” Philip Kunz, head of Global Private Banking, Southeast Asia, HSBC Private Banking, said.
The move follows HSBC’s creation in February of a new global business, Wealth and Personal Banking (WPB), meshing together retail banking and wealth management, asset management, insurance and private banking. The segment has more than $1.4 trillion in wealth balances, of which half comes from Asia.
This news service has chronicled the rise of independent wealth managers, sometimes also called external asset managers (EAMs), in Asia for some time. It is also an established market in countries such as Switzerland. These entities are often formed by breakaway teams of private bankers who seek more independence.
Singapore has moved to encourage independent wealth firms and family offices with the launch in January 2020 of its Variable Capital Company regime. The , the jurisdiction’s regulator, is said to be mulling VCC rule changes to encourage single family offices to use the structure. Such moves also sharpen Singapore’s wealth management competitive edge against rival Hong Kong.
Among the firms that had piloted the VCC structure are Aggregate Asset Management; Arborvitae Capital; Assetfort Capital; Chartered Asset Management; CSOP Asset Management; DCG Capital; Gordian Capital Singapore; Heliconia Capital Management; Kamet Capital Partners; Meilun Asset Management; Mindful Wealth; Noviscient; Raffles Family Office; SOFOS Capital Management; Tembusu Partners; Ternary Fund Management; UTI International (Singapore); and Yozma Singapore.