Issue 115 December 2017 Lite by Asian Private Banker

www.asianprivatebanker.com

Issue 115

A S I A’ S INDEPENDENT ASSET MANAGERS: A SNAPSHOT SURVEY P10 Exploring Retirement Solutions P20

I NSI DE

Industry: UBS’ private banking play in China will be “cost effective”: Axel Weber

Industry: IAM Directory

APB Mandate: AMC notes gain traction

APB Mandate: BNP Paribas WM launches sustainable equity discretionary mandate

P26

P18

P14

ISSUE 115

CONTENTS 4

Letter from the Editor

5 Echo Chamber Mandate Unconstrained bond strategies dominate fixed income fund flows in 2017 6 Industry UBS’ private banking play in China will be “cost effective”, says Axel Weber 7 Mandate Noah to target China A-shares with smart beta strategy CEO Andrew Shale Editor Sebastian Enberg Editorial Richard Otsuki Priyanka Boghani Charlene Cong Alice So Gigi Lam Liz Mak Managing Director Paris Shepherd Research Stratos Pourzitakis Business Development Sonia Lam Sam Chan Joanne Tse Olaide Ogungbesan Benjamin Yang

Digital Tristan Watkins Yiyang Zhou Cécile de Buor Evy Cheung Jacqueline Kwok Alice Wong Events Koye Sun Shunta Kamba

8 Advertorial Responsible investment solutions in an age of resource fragility 10

Industry Asia’s independent asset managers: a snapshot survey

14 Mandate BNP Paribas WM launches sustainable equity discretionary mandate

Finance & Operations Karman Wu Yuki Chan Sandy Lau Martina Ngai

15 Technology Credit Suisse PB exploring “bank-to-bank” model in Asia

Head of Europe Madhuri Chatterjee

17 Philanthropy UBS WM exploring development impact bond launch for APAC investors

Production DG3

16 Philanthropy HSBC PB’s NextGen clients go ‘hands on’ in Borneo

18 APB Mandate Investment banks continue to make foray into active management via AMC notes 20 Industry Exploring 2017 HNW Retirement Solutions

Published by Key Positioning Limited 13B Greatmany Centre 111 Queen’s Road East Wanchai, Hong Kong Tel: +852 2529 1777 Fax: +852 3013 9984 Email: info@asianprivatebanker.com ISSN NO. 2076-5320

26 Industry Independent asset manager directory 36

People Moves Movers and shakers

LETTER FROM THE EDITOR

would be remiss if I did not mention that the editorial team has emerged (mostly unscathed) from another brutal Awards for Distinction process. Winners will be formally unveiled in early January. But I would like to take this opportunity to thank all who participated - I’ll save the details for later, but fair to say that this year’s cycle has been nothing short of phenomenal, both in terms of the number of submissions received and, more importantly, the quality of those submissions. One community of wealth managers that is not (yet) recognised by our AFD programme, but which continues to grow in importance in Asia, is the IAM/multi-family office segment. Over the past few weeks, we surveyed IAMs in Hong Kong and Singapore on an anonymous basis to gauge the state of their business and the segment as a whole. The results of that survey are featured in these pages, alongside a directory of IAMs that ply their trade in Asia. Without wishing to frontrun the results:

· 82% of IAMs polled recorded a YoY increase in revenue this year while 27% said revenues have increased by more than 100% · Over one third of firms said that 40-70% clients pay an all-in flat fee · Just under 10% of the firms surveyed said they are currently unprofitable Elsewhere on these pages, we take a look at the rise in distribution of AMCs by private banks and IAMs in Asia and present some exclusive data from our latest research product, in partnership with Transamerica Life Bermuda, which examines the application of life insurance solutions for retirement planning. Enjoy!

Cheers,

Sebastian Enberg Editor Asian Private Banker

A P B M A N DAT E

e ch o cham be r “Whatever is opaque today will become transparent, and the efficiency of the industry will receive a boost, and so will the accuracy. These changes will give better support to the needs of the economy, help investors to diversify risks and allocate resources better in society.” Lufax CEO, Greg Gibbs, on the growing availability of data, which will increase wealth managers’ ability to better estimate the future performance of investments and utilise AI to construct portfolios. “We are considering development impact bonds in [the] APAC market to [cater to] philanthropists who want to give on the condition that real, sustainable impact is achieved, and ….to support programmes where there is both social impact and potentially, a result-based financial return.” Wei Wei, Asia head of UBS Wealth Management’s philanthropic arm, UBS Optimus Foundation. “I can proudly say today that [in Asia incl. Japan, India & Subcontinent] we have indeed passed the CHF 100 billion mark as of a month ago.” Jimmy Lee, head Asia Pacific, Julius Baer. “We realised that when 10% of an employee’s work involves a repetitive task, this cannot be centralised through, for example, business delivery centres. This is why we started a robotics programme six months ago where we planned to have robots carry out repetitive or labour intensive tasks.” Christian Huber, Credit Suisse Private Banking’s APAC COO. “We set out a clear strategy to leverage our large European presence to seize growth opportunities and innovation in wealth management. The acquisition of Banca Leonardo is another important step within our corporate project ‘Shaping Indosuez 2020’ and is part of Indosuez’s disciplined growth strategies, following our acquisition of Credit Industriel & Commercial earlier this year.” Pierre Masclet, Indosuez Wealth Management’s Asia CEO and Singapore branch manager.

Unconstrained bond strategies dominate fixed income fund flows in 2017 Within fixed income strategies, which of the following groups experienced the greatest YoY change in net inflows in 2017? 44%

24%

16% 9%

HY USD

EM Asia

Unconstrained

Fixed Maturity

7% Others

Source: Asian Private Banker

wing to investors’ desire to access a wider universe of fixed income instruments and gain exposure without making intra-asset class calls, unconstrained strategies have dominated bond fund demand this year, according to an Asian Private Banker survey. Nearly half (44%) of respondents to the anonymous survey of industry leaders revealed that unconstrained bond strategies have been the biggest recipients of fixed income fund inflows in Asia in 2017. US dollar-denominated high yield strategies (24%) and emerging market Asia bond funds (16%) were cited as the next most popular choices, signalling persistent demand for income. Year to date, respondents have experienced stellar growth in fund inflows, albeit off a

relatively low base in 2016. More than half (54%) of respondents registered over 20% YoY growth in net inflows in the region, while no respondents reported net outflows. Although the industry is confident about the coming 12 months, respondents in general expect the growth of inflows to moderate somewhat, with just 36% expecting more than 20% YoY growth. Asian HNWIs are still showing an insatiable demand for yield, and are accessing credit through new means this year, including via structured products in the form of fund-linked notes, which provide three-year active fixed income exposure with principal protection. Survey data was collected from leading gatekeepers in the region during Asian Private Banker’s latest Funds Selection Nexus in Hong Kong and Singapore.

INDUSTRY

UBS’ private banking play in China will be “cost effective”, says Axel Weber

BS’ chairman, Axel Weber, believes the Swiss bank’s business model gives it a leg up on foreign retail-linked rivals with designs on China’s onshore private banking market, and that collaborations with domestic banks will result in cost efficiencies. “If you look at the strategy of HSBC, Standard Chartered and Citi, for example, their business model is to have an onshore locally-run retail operation in APAC,” Weber told Asian Private Banker during a recent roundtable discussion in Zurich. “As clients [of retail-linked banks] become more prosperous, they move to the wealth management division. It’s a bottom-up process. For us, that process does not work because we are not retail and we typically focus on the upper segments of wealth and asset management in markets…” Weber says that UBS Wealth Management’s decision to stick with its business model will give it a competitive advantage over these foreign rivals. “What differentiates us from many of the other private banks in APAC is that we are not retail,” he explains, adding that outside of Switzerland, the bank does not have a retail banking arm. A few weeks ago, Weber said that the Swiss bank is confident about the prospects that exist in China, despite S&P Global downgrading the country’s credit rating. He told media that the bank’s decision to “double our headcount” in Mainland China reflects a “long-term continuous commitment” to the market. However, going onshore in several Asian markets has been a tough task for many private banks, partly due to regulatory restrictions that give domestic banks the upper hand. Indeed, UBS Wealth Management pulled out of India and Australia more than five years ago, though the Swiss bank still has a presence in India through its investment and corporate bank. When asked what UBS plans to do differently in China, Weber says that the bank’s “unique expertise” in terms of providing global investment advice and solutions will “complement” the businesses of domestic banks in APAC markets including China, Singapore and India. He adds that this is also a “cost effective” way to operate UBS’ core business outside of its home market.

Weber explains that acting as a “strategic global corporate partner of banks in markets such as China” is a win-win for both parties. “With regards to our strategy in China, when we talk to the big domestic banks we are able to say that we can collaborate because we do not compete with them, unlike our competitors with [their] own retail operations. We can offer their clients a global investment universe and wealth management services that they can cross-sell to their client base. “For them, it would be more difficult to build global investment capabilities of their own in London, New York and across the Asian region.”

China in focus UBS is one of many international banks eying the Chinese market. Just last week, DBS Private Bank set itself the ambitious target of growing its China business to account for half of its North Asian revenues by 2020. Credit Suisse Private Banking’s Greater China head, Francois Monnet, said recently that the Swiss lender is exploring partnerships onshore in the form of private labelling arrangements, co-branding, or taking a majority stake in a joint venture. Bank of Singapore CEO Bahren Shaari has also said that the Singaporean private bank is mulling a China onshore play, citing partnerships, joint ventures and the establishment of a Bank of Singapore entity as possible strategies. Earlier this year, HSBC’s regional head said the bank will hire 1,000 additional employees for its wealth management and retail banking arms in China, most of whom would be located in the Pearl River Delta. In June, the bank received regulatory approvals for a joint venture with Qianhai Financial Holdings, based in Shenzhen. From 2012 to 2016, the combined AUM of China’s Top 10 private banks grew at a compound annual rate of 30.6%, outpacing Asia’s Top 20 private banks, which notched up a CAGR of just 6.5% to collectively manage US$1.6 trillion at the end of 2016.

A P B M A N DAT E

Noah to target China A-shares with smart beta strategy

oah Holdings is talking to global institutions about codeveloping a smart beta strategy that targets China’s domestic A-share market, according to William Ma, CIO of Noah Holdings (Hong Kong). Ma told APB Mandate that the strategy will be focused on equities, adding that because of shorting difficulties in China, the vehicle will likely have a bias towards long positions. He notes that a number of other challenges will need to be overcome. For one, underlying ‘factors’ will have to be tailored to the Chinese market, since simple momentum or value plays cannot be easily replicated in China. “I think smart beta in China will have a different format in terms of the factor involved, compared to global strategies,” Ma said. Further, China’s A-share market is more volatile than other markets, which creates risk management obstacles.

“There are also regulations that will require domestic adaptations of smart beta. For instance, when a stock falls 10%, trading in that stock will be halted for the day, and vice versa when stocks are up 10%. So in terms of implementing the global smart beta methodology, you need a lot of domestic adaptations. We are discussing with our global partners about how to make China-centric smart beta products.” Two-thirds of private banks in Asia say they will either add or consider adding smart beta products to their clients’ discretionary portfolios in the next 12 months, according to a recent APB Mandate survey. Nearly half (47%) of private banking respondents say they have already explored the possibility of using smart beta solutions, which are passive instruments built using alternative index construction rules. One in five (20%) respondents say they will implement smart beta solutions in the coming 12 months, while another 47% are undecided.

AIAM Singapore Q3 Networking Event: Golf, Bowling & AGM

he Association of Independent Asset Managers in Singapore (AIAM), a voluntary commitment on the part of professionals who are united by the same dedication to building a local community of fellow independent asset managers (IAMs), hosted its third-quarter networking event on 21 September 2017 at the Singapore Island Country Club. Over golf and bowling, 170 members came together and exchanged views with industry peers. At the annual general meeting dinner,

AIAM President Steve Knabl reviewed the year gone by. Treasurer Philipp Piaz reported on memberships and financials and compliance officer Anthonia Hui called for more regulatory participation. The day ended with a renewed sense of energy, with members having been afforded the chance to engage with one another. The next members-only event will be the Year-End Gala on 1 December. For more information, please visit aiam.org.sg. 7

ADVERTORIAL

For professional and institutional investors only. Not for retail distribution.

Responsible investment solutions in an age of resource fragility The ESG approach to investing – which incorporates environmental, social and governance factors – is gaining momentum along with the realisation that this model fuels the growing need for environmental sustainability and good governance but potentially returns on investments as well. As many as 200 studies on ESG investing have found that diligent sustainability practices have a positive impact on investment performance1, and more than 2,000 academic papers have established a positive link between ESG commitments and corporate financial performance.2 Essentially, the primary objective of the ESG strategy is to generate long-term sustainable returns through a more complete understanding of operational, financial and reputational risks when investing in companies. With this in mind, asset managers who go beyond conventional financial analysis to integrate ESG criteria as an additional set of metrics to evaluate and identify the companies that are likely to emerge as winners and losers, can potentially provide investors with insights which limit blow-ups or the ability to generate alpha.

A leader in responsible investing BNP Paribas Asset Management was amongst the first signatories of the United Nations-backed Principles for Responsible Investment (PRI) network in 2006, and has been a global leader in the ESG space since. In fact, the PRI network has ranked the firm first in class for its overall approach to responsible investing. As an early adopter of the ESG-led investment approach and since the launch of its first Sustainable Responsible Investing (SRI) fund, the firm created an ESG research unit as early as 2002 and, since 2012, has

applied a policy of responsible investing to all its funds, ensuring that the companies it invests in comply with the 10 principles of the UN Global Compact.

Appreciating ‘liquid’ assets – Parvest Aqua3 The asset manager believes that water scarcity is among the most pressing environmental issues today. A 2016 World Bank report predicted that by 2020, urbanisation and growing demand for food would lead to shortages in regions where water is now plentiful. Moreover, clean water demand is expected to grow by at least 8% a year over the next two decades.4 BNP Paribas Asset Management’s Parvest Aqua fund aims to identify opportunities from the growing imbalance between water supply and demand, and invest in companies that are likely to benefit most from the expected expansion of the water sector. Headed by a seasoned and accomplished investment team, with average industry experience of 18 years, the fund has surpassed its benchmark, achieving an annualised return of 15.18% since its 2008 launch.5 Parvest Aqua is managed by BNP Paribas Asset Management’s partner, Impax Asset Management, which in 2014 received the Queen’s Award for Enterprise in Sustainable Development in recognition of its pioneering role to support the growth of companies that contribute to a more sustainable world.

For more information please contact: mandy.lui@asia.bnpparibas.com

1. Number of studies reviewed by researchers at University of Oxford - From the Stockholder to the Stakeholder, How Sustainability Can Drive Financial Outperformance, March 2015, Gordon L. Clark (University of Oxford), Andreas Feiner (Arabesque Asset Management Ltd), Michael Viehs (University of Oxford) 2. Study performed by Gunnar Friede, Timo Busch and Alexander Bassen in 2015 developed this finding - Journal of Sustainable Finance & Investment 5:4, 201-233, DOI 10.1080/20430795.2015.1118917 3. Parvest Aqua is not authorised by the Hong Kong Securities and Futures Commission and hence not available to Hong Kong retail investors. 4. Whitepaper Impax Management, end September 2012 5. BNP Paribas Securities Services. Classic Capitalisation share class, net of fees NAV-to-NAV, with dividends reinvested, annualised performance in EUR from 4 December 2008 to 31 August 2017. Annual performance for the preceding 5 years are: 2016: 11.8%, 2015: 11.57%, 2014: 14.29%, 2013: 21.17%, 2012: 20.62%. Past performance is not indicative of current or future performance. Important information: This material has been prepared and issued by BNP PARIBAS ASSET MANAGEMENT Singapore Limited (BNPP AMS)* and BNP PARIBAS ASSET MANAGEMENT Asia Limited (BNPP AMA)**. It is intended for Institutional Investors (as defined in the Securities and Futures Act, Chapter 289 of Singapore) only and is not suitable or intended for persons who do not qualify as such. The content has not been reviewed by the Monetary Authority of Singapore (“MAS”) or the Hong Kong Securities and Futures Commission (“HKSFC”). It is produced for information purposes and does not constitute any offer or investment advice. Investors should seek independent professional advice before investing, or in the absence thereof, he/she should consider whether the investments are suitable for him/her. Opinions included in this material constitute the judgement of BNPP AMS and BNPP AMA at the time specified and may be subject to change without notice. BNPP AMS and BNPP AMA are not obliged to update or alter the information or opinions contained within this material. Investments involve risks. Past performance and any economic and market trends/forecasts are not a guide to future performance. Investments involve risks. Past performance and any economic and market trends/forecasts are not a guide to future performance. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial investment. Investors should refer to the offering document for further details including risk factors. *BNP PARIBAS ASSET MANAGEMENT Singapore Limited - Registered Office: 20 Collyer Quay #01-01, 20 Collyer Quay Singapore 049319. Company Registration No:199308471D. **BNP PARIBAS ASSET MANAGEMENT Asia Limited: 30/F Three Exchange Square, 8 Connaught Place, Central, Hong Kong.

For professional and institutional investors only. Not for retail distribution.

IN A CHANGING WORLD,

WATER IS FAST BECOMING OUR MOST PRECIOUS RESOURCE.

PARVEST AQUA This investment fund selects companies that are developing solutions for treating water and limiting water waste. Invest for a better world. www.bnpparibas-am.com

The asset manager for a changing world

This material is issued by BNP PARIBAS ASSET MANAGEMENT Asia Limited, with its registered office at 30/F, Three Exchange Square, 8 Connaught Place, Central, Hong Kong and BNP PARIBAS ASSET MANAGEMENT Singapore Limited with its business address at 10 Collyer Quay, #15-01 Ocean Financial Centre, Singapore 049315. Company Registration No:199308471D. This material has not been reviewed by the Hong Kong Securities and Futures Commission (“HKSFC”) and the Monetary Authority of Singapore (“MAS”). It is produced for information purposes only and does not constitute any offer or investment advice. Parvest Aqua referred to in this material is not authorised by the HKSFC and hence not available to Hong Kong retail investors. Investors should seek independent professional advice before investing, or in the absence thereof, he/she should consider whether the fund is suitable for him/her. Investments involve risks. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial investment. Investors should refer to the offering document for 9 further details including risk factors.

INDUSTRY

Asia’s independent asset managers: a snapshot survey Chart 1: Where is your firm based?

According to one industry study, Asia’s burgeoning independent asset management industry is more-thandouble its AUM by 2020 to US$55-60 billion. This means the segment will need to grow at a CAGR in the range of 14.9-16.9%. Anecdotally, a number of firms have told Asian Private Banker throughout the course of the year that they have continued to amass client assets and grow revenues, although not all players have experienced robust growth, with consolidation also taking place in 2017. Many firms also continue to face challenges around talent and client acquisition.

Where is your firm based?

Singapore Hong Kong 45.5% 54.5% Chart 2: How many clients does your firm service?

To get a more accurate snapshot of Asia’s IAM industry as it stands, we polled a number of firms in Singapore and Hong Kong on their business performance year-to-date, capabilities and challenges. 22 firms responded to the anonymous survey, split evenly between Hong Kong and Singapore. Here are the results.

How many clients does your firm service?

above 100 9.1% below 50 36.4% 50-100 54.5%

RM headcount

art 3: How many RMs does your firm employ? How many RMs does your firm employ?

above 10 27.2%

What has been the YoY change in RM headcount at your firm?

below 5 36.4%

40%

Similarly, the number of RMs per firm ranges from 1 to 20. On average, each RM manages 13 clients. The lowest RM:client ratio recorded was 1:3 and the highest was 1:40.

% of firms

30%

5-10 36.4%

20%

10%

No change

+ 1-25%

+ 26-50%

+ 51-75%

+ 76-100%

+ >100%

None of the IAM firms surveyed recorded a drop in headcount on a YoY basis. 36% saw no change in RM headcount and 18% said their headcount had more than doubled over the last year.

INDUSTRY

Financial performance How much did your firmâ&#x20AC;&#x2122;s total revenue change in the last financial year?

40%

% of firms

30%

20%

10%

0% - 1-25%

no change

+ 1-25%

+ 26-50%

+ 51-75%

+ 76-100%

+ > 100%

82% of firms recorded an increase in revenue for their latest financial year. 27% of firms said revenues have increased by more than 100%.

What is the approximate cost/income ratio of your firm?

40%

% of firms

30%

20%

10%

50-60%

61-70%

71-80%

81-90%

91-100%

> 100%

Just over one third of IAMs have a cost/income ratio ranging from 61-70%, while only 18% have a cost/income ratio in the 50-60% range. Just under 10% of the firms surveyed are currently unprofitable.

INDUSTRY

Service/product offering Does your firm have an internal CIO office?

Yes No

What asset classes does your firm provide advisory services for?

82% 18%

firm provide Chart 6:Does Doesyour your firm offer discretionary portfolio management services? discretionary portfolio management services?

Alternatives

91%

Equities

91%

Fixed income

91%

Mutual funds

91%

Forex Other

No 9%

Yes 91%

64% 27%

Over 90% of IAMs surveyed provide advisory services on equities, fixed incomes, mutual funds and alternatives while almost two thirds provide forex advisory services.

Chart 5: The ratio of using in-house vs third party investment produc Ratio of inhouse vs third party investment products Around 80% have an internal CIO office and over 90% of IAMs provide discretionary mandates. The average minimum for DPM customisation is US$5 million.

11-20% in house/ 80-89% third party 27.4%

100% third party 45.2%

1-10% in house/ 90-99% third party 27.4% The use of inhouse investment products is relatively low. Around 45% of IAMs said 100% of client assets are invested in third party products. Of those that use inhouse solutions, the portion of client assets invested in these products ranges from 1-20%.

INDUSTRY

Chart 7: What percentage of your clients currently pay an all-in flat fee forpayyour What percentage of your clients currently an all-inservices? flat fee for your services? 41-50% 9% 51-60% 9% 1-10% 37% 61-70% 18%

0 27%

Results show a growing uptake of the all-in flat fee model in Singapore and Hong Kong. Over one third of firms said that 40-70% of clients pay an all-in flat fee. Around 27% of those surveyed do not have clients paying flat fees.

The biggest challenge: talent In general, what is the biggest challenge facing your firm at present?

Talent acquisition Client acquisition Scalability Regulatory issues

55%

What is the biggest regulatory challenge facing your firm at present?

Client onboarding requirements (KYC/AML)

64%

Common Reporting Standard (CRS)

18%

18% MiFID II

Other

SFCâ&#x20AC;&#x2122;s Manager-in-Charge programme

Suitability requirements

18% 9%

Over half of all respondents said that talent acquisition is their biggest challenge at present. Other predominant challenges include client acquisition and scalability.

In terms of the regulatory landscape, over 60% of respondents said that client onboarding requirements are the biggest challenge, while 18% of the respondents pointed to CRS.

A P B M A N DAT E

BNP Paribas WM launches sustainable equity discretionary mandate

NP Paribas Wealth Management has launched a sustainable equity discretionary mandate in Asia that adopts a traditional ESG approach, APB Mandate can reveal.

The innovation is in line with the bank’s commitment to sustainable investment, as part of its “2020 Vision”. Speaking with APB Mandate, Garth Bregman, head of portfolio management, Asia, BNP Paribas Wealth Management, noted that though the demand from Asia clients for ESG-screened solutions in the discretionary space is nascent, the private bank is keen to be “at the forefront of what will eventually be a growing trend in Asia”. “We invest across different sectors and industries, with a positive screening / best-in-class approach that takes into account extra-financial environmental, social and governance criteria, as well as traditional fundamental analysis,” Bregman added, pointing to the importance of ESG to the bank’s business in Europe. Demand for sustainable investing has grown steadily in recent years. According to data from the Global Sustainable Investment Review, US$22.89 trillion of assets, globally, were professionally managed under responsible investment strategies in 2016 – an increase of 25.2% compared to 2014.

In a recent interview, Robeco’s head of ESG integration team, Masja Zandbergen, said that the firm is seeing greater interest from both institutional investors and private banks in Asia towards sustainable investing strategies. “Speaking to clients in the region (both institutional and private banks especially the global banks), many are interested to learn more about how they can implement sustainability investing [in their portfolios],” Zandbergen noted. “In Europe, specifically for private banks, we see those that are able to capitalise on this trend were able to attract relatively larger flows versus their competitors.” Perhaps unsurprisingly, millennial HNWIs have proven themselves more willing than older investors to pursue ESG-screened investment strategies. In a survey conducted by FactSet with 1,022 HNW and UHNW respondents across the world, over 60% of millennials said that they “expect their wealth management firms to screen investments” based on ESG factors. By comparison, 53% of investors aged 35 to 54 share the same sentiment. Accordingly, Zandbergen said that private banks need to seriously consider the younger generation to attract future clients and assets.

Europe and the US lead the pack, together accounting for over 90% of the total in 2016 in terms of assets, with Asia lagging the pack.

Table 1: Growth of SRI Assets by Region 2014-2016 Region

2014

2016

Growth over period

Compound Annual Growth Rate

Europe

$10,775

$12,040

11.7%

5.7%

United States

$6,572

$8,723

32.7%

15.2%

Canada

$729

$1,086

49.0%

22.0%

Australia/New Zealand

$148

$516

247.5%

86.4%

Asia ex Japan

$45

$52

15.7%

7.6%

Japan

$474

6689.6%

724%

Total

$18,276

$22,890

25.2%

11.9%

Source: Global Sustainable Investment Alliance Notes: Asset values are expressed in billions. Asia ex-Japan 2014 assets are represented in USD based on the exchange rates at YE2013. All other 2014 assets, as well as other 2016 assets, are converted to USD based on exchange rates at YE2015.

TECHNOLOGY

Credit Suisse PB exploring “bank-to-bank” model in Asia Currently, Indosuez Wealth Management, the private banking arm of Credit Agricole, offers a BPO service to other banks, called S2i, which manages CHF120 billion in client assets. According to the bank’s website, S2i is used by 28 banks globally, including UBP in Asia. A survey conducted by consulting firm Synpulse found that a private bank in Asia with US$10 billion in AUM could save 50-70% in non-front office-related operations costs if it went with a BPO solution that offers application service provider support, infrastructure and technology maintenance as well as outsourcing and banking operations processes. Furthermore, it could increase revenue per relationship manager by 1020% and AUM per relationship manager by 5-15%.

Christian Huber, Credit Suisse

Credit Suisse Private Banking is currently exploring the “bank-to-bank” or business process outsourcing (BPO) model in Asia, according to the Swiss major’s APAC COO, Christian Huber. “We already have this model [bank-to-bank model] in Switzerland and in Europe, where this industry is more advanced and we are starting to look at it in Asia but we are still [at] an early stage,” Huber told Asian Private Banker in an exclusive interview.

The findings also showed that a private bank with US$10 billion in AUM that has chosen to use a BPO service can potentially grow “conservatively” by US$400 million every year.

Industry scepticism However, not all industry participants are sold on the bank-to-bank approach. BMO Private Bank’s Monique Chan said recently that “there are risks of outsourcing, such as quality control and data security”. “It may be a cost-effective answer, but does a private bank want to lose autonomy and its independence?” Chan said.

Huber said that the BPO model is a viable option for smaller private banks where both the cost and complexity of doing business are “generally going up as they do not have the budgets to transform their bank and do the heavy lifting”.

Meanwhile, Eddy Tai, Bank of Singapore’s global tech head, noted that very few private banks have opted to outsource following Deutsche Bank Wealth Management’s decision to do so in 2016, and that this is proof that private banks have not warmed to the idea.

He added that smaller private banks are unable to integrate and partner with fintech solutions “easily” due to scale issues.

“Currently, the BPO proposition is not popular in Asia,” Tai said. “This is evident from the number of smaller players opting to leave the market [rather] than outsource their back offices to a BPO centre.”

The bank-to-bank approach is likely to gain in traction in the region, particularly for platforms that are not core to investment advisory such as risk systems or investment suitability frameworks. Huber said that as long as smaller private banks do not share data and client details, conflicts of interest could be avoided. The move echoes comments made in June by UBS’ Kathryn Shih, who said that a rising regulatory burden and the hefty upfront cost of installing front-to-back platforms will make it difficult for smaller private banks to stay afloat.

Indeed, Avaloq’s BPO service partnered with Deutsche Bank Wealth Management in Singapore at the start of 2016, becoming the first private bank to outsource its back-office. The tech firm recently signed on newly-established Bank of Asia. Avaloq’s CEO and founder, Francisco Fernandez, told Asian Private Banker that he does not think this is a sustainable solution because it could engender conflicts of interest.

“A possible alternative for smaller private banks to ride the tech wave is to rent a [technology] platform from bigger players,” Shih said.

“The bank-to-bank model will not work, we believe, as incumbents are already dealing with costly and complex platforms which can be difficult to replicate for smaller private banks,” he said. “There is also the issue of customer data confidentiality.”

Shih believes that high tech costs are driving smaller private banks – typically those with less than US$20 billion in AUM – to exit the industry.

Fernandez added that this model has been trialled in Europe with little success. 15

PHILANTHROPY

HSBC PB’s NextGen clients go ‘hands on’ in Borneo

SBC Private Banking has taken a group of 10 NextGen UHNW clients – including six from Asia – to Borneo’s rainforest for a five-day hands-on learning experience on sustainability. The aim? To go beyond the ‘traditional advisor’ role, said Matthew Robinson, sustainability engagement head, global corporate sustainability at HSBC. Robinson said that the private bank invited only those “future business leaders” who expressed an interest in climate change, taking them “out of their offices and into nature” for its NextGen Sustainability Programme 2017 in September. During the five-day trip, clients learned about climate change and human driven environmental change at the theoretical and practical levels. Activities included going into the rainforest to participate in live research with EarthWatch scientists, sustainability talks from local and global small to medium enterprises (SMEs) and crafting development business plans.At the same time, the programme – inspired by HSBC’s internal global sustainability leadership programme launched in 2010 – presented their clients with an opportunity to “fully understand HSBC’s global commitment to sustainability”, said Robinson. Most recently, HSBC pledged US$100 billion for sustainable investments and financing by 2025 and set four environmental protection goals in line with its social, environmental and governance (ESG) responsibilities. Robinson discussed the details of Borneo programme with Asian Private Banker.

Matthew, why were climate and environmental change selected as themes pertinent to your NextGen clients? The programme is about supporting our clients and enabling them to future-proof their businesses. It also helps them to understand why protecting and conserving the planet and its finite resources is critical. A large aspect of the programme was also about getting the clients out of the office and into nature to help them decompress and think differently about the world in which they live and work. All those involved can then share ideas, and challenge each other’s thinking about how they as individuals and businesses can be more sustainable. At the same time, they get to fully understand HSBC’s global commitment to sustainability, and can then seek ways to take advantage of the bank’s global network and sustainable financing expertise in making their business practices and behaviours more sustainable. One part of the programme involved clients “getting their hands dirty” and participating in live research. What did this involve and what was the outcome? The programme involved many experiential elements. For example, to help the clients better understand the biodiversity value of the rainforest ecosystem, part of the programme included them planting over 100 native tree saplings to enhance the biodiversity and carbon sequestration potential of the rainforest.

What role did local and global SMEs play in educating clients about sustainability? In addition to in-depth presentations by a global sustainability SME from the HSBC group, there were also interactive classroom sessions. The SME, alongside Earthwatch facilitators (our NGO partner), discussed and looked at how the client’s family business could help support the UN Sustainable Development Goals. What plans have clients made as a direct result of this experience? The clients also got the opportunity to map out and strategise what their family businesses would look like in 2030 in terms of operating in a sustainable way. Part of the presentations included content on HSBC’s contribution to sustainability, our expertise in Sustainable Finance and how we can support the client’s family business become more sustainable. To what extent were HSBC Private Banking’s RMs involved in the programme? As RMs have intimate knowledge of their clients’ interests and priorities, their role is crucial in ensuring clients are able to make the most of these opportunities Was there any obligation or commitment required by these clients to invest in HSBC’s impact investing/sustainability initiatives after this programme? No, the focus of the programme is to immerse our NextGen clients in the understanding of sustainability and human-driven impact on the environment. How did HSBC Private Banking justify the cost of the programme? The programme is an investment in future generations, not just for the bank, but for our community. So what was your ultimate goal in providing such a hands-on programme? By leveraging HSBC’s global network and expertise in sustainability and sustainable financing, the NexGen Sustainability Leadership Programme helps clients build confidence that they can make a difference to how their family businesses operate and how they can impact the society in which they operate. Has the private bank set targets in terms of family asset retention and growth as an outcome of this programme? We aim to first raise awareness of the importance of sustainability for the long-term success of our clients’ families, as well as their family businesses. We would like to be their long-term partner in supporting their sustainable ambitions, both on the commercial side as well as in their personal wealth management needs. Any plans to do roll out another programme like this again in the near future? We are always looking for new ways to engage our clients on topics they are interested in and on important issues such as sustainability.

PHILANTHROPY

UBS WM exploring development impact bond launch for APAC investors

BS Wealth Management is considering launching a development impact bond (DIB) for its philanthropically-minded APAC clients seeking sustainable impact options, Wei Wei, Asia head of UBS Wealth Management’s philanthropic arm, UBS Optimus Foundation, tells Asian Private Banker. “In APAC, we see an ever growing number of philanthropists standing ready to give [but all] too often they are unsure about the accountability of partners and the results of their giving,” Wei said. He noted that many Asian client donors are “very hands on” and “highly engaged in the full life cycle” when it comes to following up on the outcome of their donations to the UBS Optimus Foundation. While still a relatively new development mechanism, Wei believes that DIBs provide donors with an innovative financing instrument that goes beyond the traditional philanthropy model of grant-making or ‘blank cheque’ charity. “We are considering DIB in [the] APAC market to [cater to] philanthropists who want to give on condition that real, sustainable impact is achieved, and ….to support programmes where there is both social impact and potentially, a result-based financial return,” he said. DIBs are commonly known as payment-for-result schemes and do not resemble commercial bonds or green bonds in any way. They are an adapted form of social impact bonds (SIBs), which have been around for more than five years in the US and the UK. The chief differences between the two lie in the outcome payor and country context. With SIBs, the outcome payor is the government and most are created under the assumption that a successful intervention will represent a significant long-term cost saving for the government. The majority of SIBs are tailored to developed countries. DIBs, on the other hand, rely on private sector support as the outcome payor and are designed for a developing country context. Last week, UBS Optimus Foundation pledged up to US$3.5 million in working capital as the upfront funder of a healthcare DIB in Rajasthan, India, called the Maternal and Newborn Health DIB. The initiative brings together several stakeholders, including USAID, MSD for Mothers, Convergence, HLFPPT, PSI (India), Palladium, Reed Smith and Social Finance, and aims to reduce maternal and newborn death rates in Rajasthan. The project is the second UBS-backed DIB initiative to date.

Wei Wei, UBS Optimus Foundation

In 2015, UBS Wealth Management rolled out a DIB targeting education, which garnered interest from Hong Kong-based clients due in large part to the philanthropic initiative’s focus on delivering predefined outcomes, Phyllis Costanza, CEO of UBS Optimus Foundation, told Asian Private Banker at the time. The education DIB, which remains in a proof-of-concept stage, aims to reduce the gender gap in education in Rajasthan by increasing the enrollment rate of girls over a threeyear period. Its target is 9,000 girls in 166 schools across 140 villages in Bhilwara District. The education DIB has achieved 87.7% of the threeyear enrollment target and 50.3% of the learning target, according to a press statement from UBS in June. DIBs have gained popularity among HNW investors, particularly millennials, in large part due to their result-driven approach. However, as with most innovative financing models in the impact investing space, DIBs face challenges due to a dearth of concrete data in the developing world. And while interest is picking up among philanthropists keen to explore different modes of delivering social impact, the approach still relies heavily on the role of private investors. Therefore, harnessing the power of private capital is crucial to the sustainability of the DIB model. According to the UN, the market for SIBs and DIBs is still young, with approximately US$322 million of investments committed to either investment tools, globally. As of August 2017, over 89 SIBs have been contracted globally. Two DIBs have been designed and 60 are being negotiated.

A P B M A N DAT E

Investment banks continue to make foray into active management via AMC notes

he early 2017 success of fund derivative distribution in Asia, coupled with a growing demand for simple and flexible implementation across various equity themes, has strengthened the hold of investment banks’ hold within an area commonly occupied by traditional long-only managers, via actively managed certificates (AMC).

According to Huynh, Deutsche Bank Wealth Management’s Asia clients had already booked profits on top funds and though they wished to continue participating in further upside through such strategies, elevated risks posed as material obstacle for re-entry. Instead of merely buying the fund, clients were advised to pay a premium to obtain high levels of principal protection on the same fund.

Investors: Greater flexibility with a myriad of features

“There onwards, we believed there was untapped demand for other actively managed strategies in a note format,” continued Huynh. “Moving forward, AMCs can be used as a quick, low-cost pipeline to gauge client interest, alongside the added benefits of various structured product features, before fully launching new funds or discretionary mandates.”

Although AMC notes are not new to Asia, their success this year can be linked to initial client interest in fund derivatives. Following the multi-year success of fixed income fund distribution in the region, 2017 kicked off with new structured product innovations addressing growing concerns around concentration risk and tail risks. Numerous private banks distributed fund-linked notes - mostly 3-year principal protected notes linked with major bond funds like PIMCO’s Global Income strategy. “We began to explore opportunities in AMCs after observing strong success from fund-linked notes,” shared Tuan Huynh, Asia CIO and head of discretionary portfolio management (DPM) at Deutsche Bank Wealth Management.

The flexibility of such solutions allows for a wide range of strategies such as multi-asset or widely popular equity themes like technology, and features including capital protection, target volatility or leveraged investments (especially for clients that struggle to obtain leverage outside of the note from private banks). Further, for wealth managers that lack the scale to internally house large research teams to cover markets involved in a high-conviction theme, investment banks readily offer their own research to back new solutions.

Wealth managers: Leveraging investment banks for superior efficiency Beyond providing flexible access to a wide range of strategies, AMC notes, when used to implement active views, bring superior benefits, especially if a wealth manager is unable to quickly launch new funds and mandates or it does not possess the reach to support global strategies with in-house research. In addition to small-to-medium private banks, external asset managers can also benefit. “The key reason why AMCs are popular among small firms is that AMCs are much quicker and cheaper to set up, as they are issued by banks, which means they don’t have to be approved by regulators in the same ways as funds do,” says Harmen Overdijk, founding partner, The Capital Company Hong Kong Limited. There are myriad other operational reasons to deliver sound investment solutions through AMC wrappers, including the outsourcing of downstream operations like trading and execution to investment banks. Minimum thresholds are significantly lower which can serve as a key differentiator when targeting smaller client accounts that lack the size to participate in strategies such as hedge funds. Time-tomarket is significantly faster, which is critical for thematic investment

A P B M A N DAT E

ideas that are time-sensitive and have a small window of opportunity. But perhaps the key benefit, which relates to business risk, is the relatively low amount of asset-raising required to justify the cost of an AMC launch and the lower cost to closing such solutions should they lack traction. “Additionally, another key advantage of AMCs is that you can launch it with a smaller amount of money,” Overdijk adds. “For independent asset managers, if they have a good idea, but they are not certain how much capital can be raised from clients, using AMCs is a way to launch the strategy without taking significant risks and time. Also, if not successful, closing an AMC doesn’t cost much and is relatively simple as well, whilst it can be costly to close a mutual fund if it doesn’t perform well.” It can take as little as two weeks to launch an AMC note and just US$5 million to justify the business case. In comparison, a fund launch can take months to be approved and, for most private banks, require inflows of around US$50 million for the fund to be considered a viable and sustainable offering over the longer term.

Aftersales: How to explain structured products in DPM solutions? Even so, some harbour concerns over potential difficulties when conducting aftersales and explaining explaining to clients the existence of structured products within a discretionary mandate given a growing demand for both transparency and the implementation of investment strategies via single securities. One industry veteran believes that this is a matter of positioning these lines as trade ideas with an “end state” and not as exposures with perpetuity. but which is akin the the common buy-and-hold behaviour of widely employed by Asian HNWIs, especially with regards to fixed income investing.

“Indeed, given the increased transparency, lines of structured notes inside their discretionary mandates may surprise a few clients,” explains Lemuel Lee, deputy head of investment services Asia, BNP Paribas Wealth Management. “But the compelling feature is the fact that there is an end state to these positions—in other words, there is a window based on a specific trade idea that, if communicated effectively, can entice investors to accept relative opacity. And considering that many clients buy and hold various investments till maturity (e.g. single bonds, fixed maturity bond funds, structured products), AMC investing has a good fit to this financial behavioural tendency.” The increasing demand for AMC notes is not only proof of the growing innovation from investment banks that wish to carve out their own share of wealth management revenue generated from portfolio management businesses in Asia, but also rapidly growing needs for actively managed solutions from the broader market via a wider range of instruments. As of 2016-end, DPM assets in Asia totalled US$120 billion, more than 9% year-on-year growth, and numerous players in 2017 are recording new-highs in net asset inflows. Time will tell if investment banks will have a lasting role contributing to DPM solutions in Asia, especially when considering the size and scale of larger players in the region which continue to prefer implementing their strategies through traditional means like funds or single securities. But at a mere 8% penetration of private banking AUMs in Asia, and much lower when considering the amount of client assets that still reside onshore, the future is bright for investment banks that can manufacture not only solutions with compelling reference assets or attractive pay-offs, but provide a whole range of both investment (and operational) solutions for private banks which are all attempting to capture a greater wallet share from HNWIs in the fastest growing economies through platforms of varying forms and sizes. 19

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Exploring 2017 HNW Retirement Solutions Introduction Following a period of rapid economic transformation and breakneck economic growth, the Asia Pacific has become a growth engine for the global high net worth (HNW) population. According to the Credit Suisse Research Institute, the region is now home to 22% of the world’s UHNW population. Asia’s (ex-China onshore) top 20 private banks managed US$1.55 trillion worth of client assets in 2016, 6.1% higher than the total in 2015, according to Asian Private Banker’s 2016 AUM League Table. After having reaped the “demographic dividend” of a growing population, the region’s population has been ageing at a remarkable speed and this has important implications for labour markets, public policies, interest rates and investment and savings decisions. Against this backdrop, retirement planning is becoming an important area of focus for HNWIs and UHNWIs who seek concrete solutions to the daunting task of meeting multiple targets, including wealth transfer, estate planning, and maintaining their lifestyle upon their retirement. To this end, life insurance products have emerged as a valuable tool for retirement solutions with specialists projecting robust growth. Responding to growing interest in retirement-focused life insurance products, Asian Private Banker, in partnership with Transamerica Life Bermuda, explored the life insurance market in Hong Kong and Singapore. Based on research that took place from February until August 2017 Asian Private Banker’s research team interviewed a total

of 456 relationship managers (RMs), brokers, and end-clients. Τhe prospects for the life insurance market in Hong Kong and Singapore appear promising, with more than 70% of responding relationship managers and the majority of brokers expressing their optimism for the popularity of life insurance policies over the following 24-36 months. Without doubt, life insurance policies take the lion’s share in the both markets with 77% of RMs clients holding life insurance policies, followed by those who hold whole of life insurance policies who represent 15% of the market. These numbers denote a distinct comparative advantage of the two specific policies vis-a-vis the preferences of end-clients and brokers. The dominant role of life insurance and whole of life insurance policies is also reflected in the RMs projections about the future popularity of life insurance policies. Furthermore, Mainland Chinese form an increasingly important segment of the life insurance market as , according to the Credit Suisse Research Institute, in 2015, there were 123,800 UHNWIs globally and China ranked second, behind the US, with 9,550 UHNWIs. Julius Baer calculated that, by 2020, Asia could be home to more than US$14.5 trillion in HNW wealth, with China alone accounting for over 50% of this total. Seeking to diversify their investments, hedge against risks, prepare for their retirement but also transfer their money offshore Mainland Chinese HNWIs and UHNWIs have become increasingly interested in life insurance products. Hence, most Hong Kong-based

Chart 1: 24-36 Month popularity forecast of life insurance policies

80% % who think it will increase

60% % who think it will remain the same

40%

20%

% who think it will decrease

0% UL

Whole Life

Term Life

Joint Life

Private Investment Retirement Variable - Linked - Planning Universal Placement Insurance Life (VUL) Life Insurance Life Solution (PPLI) Source: Asian Private Banker

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Chart 2: Percentage breakdown by total size of life insurance policy coverage among RM’s clients 60%

40%

20%

0% <US$10M

US$10M US$30M

US$30M US$50M

>US$50 M

Source: Asian Private Banker

RMs who have a significant number of Mainland Chinese clients responded that more than 5% of their clients hold life insurance policies. Moreover, 41% of RMs’ clients with life insurance enjoy coverage of more than US$10 million, with 11% having more than US$30 million in life insurance coverage. This underscores the potential of life insurance for UHNWIs in Hong Kong and Singapore. Meanwhile, a significant number of brokers, when interviewed, said family offices are playing an increasingly important role as their partners, with responses such as “we work increasingly with family offices” and “we work selectively more with family offices” being interestingly frequent. This reflects the sharp rise of UHNWIs in Asia and the rising importance of family offices in the region. Furthermore, when analysing this trend, we need to take into account the fact that a number of China-based family offices specialise in life insurance products and may have a bias towards universal life policies.

Figure 1: Conceptualisation of retirement planning

Tax Estate Security Risk Lifestyle Transfer Wealth Legacy Death Planning

planning, business transfer, nancial security, effective liquidity, hedging against tax and legal risks as well as maintaining lifestyle. While most respondents and interviewees believe that retirement planning should be high on the agenda of end-clients and their RMs, we need to keep in mind that retiring is not a priority for most of our respondents - 36% of whom said they will only retire in over a decade, while 15.4% responded that they do not intend to retire.

Chart 3: When do you intend to retire? 15.4% Do not intend to retire

2. HNWIs’/UHNWIs’ Attitudes Towards Retirement Planning So how do HNWIs and UHNWIs conceptualize retirement planning? For one thing, retirement is a multifaceted concept that touches upon different aspects of economic and social life, while also entailing a psychological dimension. For example, in many cases, brokers and RMs noted cultural and personal issues that determine people’s standpoints towards retirement planning. While retirement planning is a process that differs based on wealth, a common denominator amongst all segments of our sample group is that clients want to ensure financial security for their families, with a focus on maximising efficiency in succession and legacy planning while also ensuring that they will maintain their lifestyles post-retirement. The notion of retirement includes a constellation of ancillary concepts that stretch across a spectrum of needs, wishes and priorities of HNWIs and UHNWIs in Asia. Retirement planning encapsulates the concepts of legacy planning, wealth transfer, estate and inheritance

Children

33.2% Already retired

3.8% Within 5 years 11.5% Within the decade

36.1% Over a decade away

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Chart 4: Relevance of retirement to RMâ&#x20AC;&#x2122;s clients (by client type)

Chart 5: Confidence in retirement plan & interest in purchasing life insurance 50%

4.00

40% 3.75

30% 3.50

20%

3.25

10% 0%

3.00 Mass millionaire/ HNW

Family wealth

Male

Entrepreneur s

Business executive

Female

Not confident Interested in purchasing

Somewhat confident

Very confident

Not interested

UHNW

In line with life-cycle hypothesis, clients, in their 30s, are primarily concerned about the needs of their immediate family. Family/wealth transfer becomes an issue when they turn 40 and then, once they become 50, they become more concerned about maintaining their lifestyles post-retirement. Retirement planning is relevant across all different groups of RMsâ&#x20AC;&#x2122; clients regardless of their source of income as well as their investable assets. Among others, for UHNWIs, it is important to plan ahead so that their heirs have immediate access to liquidity in the event of death or incapacitation. Against this backdrop, insurance products appear to be a promising option for clients, as insurance can ameliorate their limited confidence in their decisions on retirement planning. In particular, 42% of respondents expressed limited confidence in their retirement planning, combined with an interest in purchasing insurance for retirement purposes. At the same time, 11% of respondents have no confidence in their retirement planning, while 19% are interested in purchasing insurance products for retirement purposes despite their confidence in their existing retirement planning. This portion of respondents represents a part of our sample population that seeks to maximise the effectiveness of retirement planning. In many cases the decision to purchase life insurance policy is the outcome of a trigger event. Interestingly, one broker offered a very vivid anecdotal example when she described how one of her clients decided to buy a life insurance product for retirement planning purposes when the client witnessed a co-passenger suffering a heart attack during a flight! Therefore, brokers view retirement as well as a choice criteria which fall within the conceptual framework of retirement planning as of particular importance when selling a UL policy.

Chart 6: How important to end-clients are the following criteria when selling a UL policy? 5.0

4.0

3.0

2.0

1.0 Retirement

Access to additional leverag e

Tax planning

Asset diversiďŹ cation

Liquidity planning

Estate and inheritance planning

Succession planning

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3. Desired Product Features and the Distribution Model of Retirement-Focused Life Insurance Products

Chart 7: Importance of criteria when selecting life insurance provider

Amid growing interest from HNWIs/UHNWIs in retirement-focused life insurance products, and with brokers highlighting the promising outlook for this market, different segments of our sample population prioritise different criteria when selecting life insurance products as part of their retirement planning efforts. In particular, price remains a particular issue for clients when selecting retirement-focused life insurance products. On a scale of 1 to 5, pricing ranked first with a score 4.56. On the other hand, most brokers we interviewed suggested that pricing is not equally important for all clients. For UHNWIs, pricing is not a first priority given their levels of wealth. One broker suggested that under certain circumstances, high premiums can make life insurance even more attractive for certain clients. The broker used HSBC’s life insurance product suite as an example, saying that while the bank’s products are slightly more expensive than others, they are particularly attractive to some UHNWIs, who think of them as superior.

Financial strength /rating

Servicing

Brand

Turnaround

Pricing

Relationship/expertise

Product range

Financial incentive

From a geographical perspective, a meaningful number of brokers noted that clients from Mainland China and non-resident Indians (NRIs) are more sensitive to pricing compared to clients from Hong Kong and Singapore. This was attributed to cultural differences and to different levels of maturity amongst these two groups of clients. For clients, high coverage amounts, regular income payouts, death benefits and lifelong coverage are the most important features that a retirement-focused insurance solution should address.

Similarly, when asked about their criteria for choosing a retirementfocused insurance solution, clients ranked stable, regular income

Chart 8: Needs that clients would want a retirement-focused insurance solution to address 80%

60%

40% 20%

0% High coverage amount

Lifelong coverage

Deat h beneﬁt

Regular income payout

No medical under writin g needed

Guaran teed Premiu m issuan ce up ﬁnancibl e (hig h day to a limit 1 cash value)

Guaran teed beneﬁt

Nonguarantee d beneﬁt with upsid e potentia l

Join t life

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payouts as most important, followed by multi-generational planning and access to premium financing. The distribution model of life insurance products is based on the interaction between RMs clients and brokers. One needs to keep in mind that the relationship between RMs and client is usually longstanding and based on mutual trust. 68.8% of responding end-clients have been with their current RMs for more than five years, while 76.5% of them answered that they trust their current RMs to present solutions that fit their needs/wants.

Chart 10: Do you trust your current RM to present the solutions that fits your needs/ wants? No 23.5%

It is also important to note that RMs appear satisfied with the features of existing retirement-focused insurance products. When asked to assess the importance of a number of product characteristics, most RMs said that the features in question have been adequately addressed.

Yes 76.5%

In parallel, brokers are enthusiastic about life insurance products, particularly universal life and to a lesser extent whole life insurance. In all of our interviews with brokers, their optimism that the life insurance market is robust hinges on burgeoning demand. For brokers, a number of features are equally important when it comes to retirement-focused insurance, and these features are similar to those desired by clients. They view premium financing and guaranteed income as issues of high relevance for retirement-focused insurance. Premium financeability, annuity payout/income flexibility and whole

life features are also highly important factors motivating brokers to sell retirement solutions. All in all, premium financing appears to be very highly valued by brokers, and this should be considered alongside their expressed concerns about access to premium financing.

Chart 11: RMs’ insights about what issues retirement-focused insurance solutions should address

50%

What is ALREADY addressed

40%

What SHOULD be addressed

30%

20%

Other

Joint life

Non-guarateed beneﬁt with upside potential

Guarateed issuance up to a certain limit

No medical underwriting needed

Premium refundable (high 1 day cash value)

Death beneﬁt

Guarateed beneﬁt

Regular income payout

High coverage amount

Lifelong coverage

10%

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Chart 12: Importance of factors that motivate brokers to sell a retirement solution

Chart 13: Percentage of clients that RMs have referred for a retirement solution Unsure 3.6%

4.25

>10% 28.6%

4.00

<5% 35.7%

3.75

3.50

5-10% 32.1%

3.25 Multi- generational coverage

Commission

High sum assured possibilit y

Whole-life feature

Annuity payout/ income flexibility

Joint-life feature

Guaranteed issuance

Premium ďŹ nanceable

Despite the fact that RMs are satisfied with existing retirementfocused insurance products, and despite the close relationship between RMs and clients, together with the high relevance of retirement and retirement-related issues, the percentage of clients that RMs have referred for a HNW retirement planning insurance solution remains relatively low: for 67.8% of RMs, the percentage does not exceed 10%. Yet, despite the fact that RM-client relationships tend to be well established, a considerable group of RMs (40%) have not had a discussion with their end-clients about retirement planning insurance solutions. Within this group, 58% of RMs are not aware of any HNW retirement products. In other words, at least 23% of RMs are not aware of any HNW retirement products. What is more, 40% of RMs have not been introduced to HNW retirement-planning insurance solutions by brokers, while 58% of RMs have not received training related to HNW retirement insurance. Meanwhile, most brokers do not provide training and product introduction initiatives. In particular, 54% of responding brokers have never conducted training sessions with clients that focused on HNW retirement solutions.

These findings underscore the untapped potential of training and promotion programmes for retirement-focused life insurance products. This is not to say that brokers do not allocate resources to this segment of the insurance market, as a meaningful portion of brokers described how they have been engaging with the banking community via lunch-and-learn events, product introduction initiatives and networking events. What is more, part of an ongoing initiative on behalf of brokers is to target Mainland Chinese clients, with the aim of boosting their appreciation for the value of retirement planning and life insurance at an early age. What we can conclude, though, is that current initiatives do not go far enough to meet growing appetite for the promotion of life insurance policies as retirement planning solutions, to quote a Singapore-based broker. All in all, despite existing challenges, the region has been undergoing the largest wealth transfer in historyâ&#x20AC;? and the demand for retirement planning solutions will remain robust. Insurance providers can boost their market share by introducing new retirement-focused life insurance solutions that can address the retirement needs of HNWIs and UHNWIs. New retirement-focused life insurance products should help clients ensure economic security for their family and maintain their lifestyle. In parallel, without overlooking the importance of pricing, insurance providers should focus on issues such as premium financeable and transparency of pricing calculations. Furthermore, it is important to give priority to certain product features such as guaranteed issuance, regular income payout, lifelong and multigenerational coverage as well as high benefit.

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Independent asset manager directory Alpha Quest Pte. Ltd. Headquarters Singapore Founded 2016 Licence Registered Fund Management Company (RFMC) Target Client Segment Accredited investors, Asia Pacific Key Personnel Vinit Sarangdhar, Managing Director Vinit Sarangdhar, founder of Alpha Quest, has vast experience in trading, portfolio management, derivatives and risk management. He brings objective, timely and cost-effective wealth management products and solutions to investors.

Company Website www.alpha-quest.com Other Contacts info@alpha-quest.com Company’s value proposition We assist high net worth families to grow their wealth by providing them the following main services: 1. Discretionary portfolio management; 2. Portfolio and product advisory; 3. Trading. We are independent and flexible, we provide various types of research, advice, products and services in a transparent, timely and cost-effective manner. Our key strengths - objective analysis, timely decision making and implementation, prudent risk management, resourcefulness enable clients to achieve their investment objectives.

AL Wealth Partners Pte Ltd Headquarters Singapore Founded 2007 Licence CMS licence (Fund Management) Target Client Segment Institutional investors and high net worth individuals, US$10 million minimum initial AUM, Global Key Personnel HUI May Yan, Anthonia (许美茵) Co-founder, AL Wealth Partners Pte Ltd Anthonia has over 30 years’ experience in banking built upon successfully preserving and growing multi-generations’ wealth of her global ultra high-net-worth clients across various international banks. Leonardo DRAGO (龍小平) Co-founder, AL Wealth Partners Pte Ltd Leonardo specialises in managing institutional and ultra-high net worth individuals’ wealth with tailored macroeconomic strategies that he has developed, which have successfully navigated through severe market crisis periods in 2002 and 2008.

Company Website www.alwealthpartners.com Address: Millenia Tower #18-02A, One Temasek Avenue, Singapore 039192 Tel: +65 6891 9121 Fax: +65 6238 0380 Email: info@mywealthpartners.net Company’s value proposition Investors are typically classified as conservative/balanced/aggressive, and fit into a standard model, usually a variation of the 60% equity / 40% bond allocation. In our experience clients never fit into such a simplified risk category, which does not take into consideration the real purpose of wealth for each family member. In order to achieve the goals set out at the beginning, rather than using investment strategies that involve significant risk and uncertainty, ALWP uses an investment framework that gives investors a combination of strategies to target close to 100% confidence in achieving these goals, especially through the inevitable crisis periods.

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Antarctica Asset Management Headquarters London Founded 2001 Branches BVI, Hong Kong, New York, Geneva Licence SFC Type 4, 9 Target Client Segment Private wealth, Private Banks, Wealth Managers, Family Offices, UHNWI, etc US$1 - 100 million, global Company Website www.antarcticaam.com

Other Contact

ir@antarcticaam.com

Company’s value proposition • Antarctica is a hedge fund advisory firm • We offer our services via FoFs, bespoke solutions as well as a direct access platform • We have a strong pedigree servicing private wealth in an asset class that is not always easy to access and comprehend

Avenue Asset Management Limited Headquarters Hong Kong Founded 2015 Licence SFC Type 1, 4, 9 Target Client Segment HNW clients Company Website www.avenue.limited

Other Contact info@avenue.limited Company’s value proposition Deliver a steady and consistent risk-adjusted return to investors

Carret Private Capital Limited Headquarters Hong Kong Founded 2015 Licence SFC Type 1, 4, 9 Target Client Segment UHNW, Pan Asia Key Personnel Kenny Ho is a Managing Partner of Carret Private Capital Limited. He has been in the banking industry for over 20 years, most recently as the Asian Head of Investments for Bank Julius Baer and prior to that the Head of Products for Credit Suisse.

Company Website www.carretprivate.com Other Contact info@carretprivate.com Company’s value proposition • Value based, long term investment approach • Independent and unbiased expert investment advice • Strong asset management and deal sourcing capabilities • Experienced team, extensive network • Local knowledge, Asian family partners • Well established US affiliate with long history, deep resources

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Crossbridge Capital Asia Pte Ltd Headquarters Hong Kong Founded 2008 Branches London, Monaco, Malta, Singapore Licence CMS Licence (Fund Management) Target Client Segment Accredited Investors, HNWIs and UHNWIs globally Key Personnel 1. Yai Sukonthabhund, Partner & Chief Executive Officer 2. Zoë Hubbard, Group Chief Operating Office 3. Charlie O’Flaherty, Partner and Head of Digital Strategy & Distribution

Company Website www.crossbridgecapital.com Other Contact info@crossbridgecapital.com Company’s value proposition We are a fully integrated financial services platform offering wealth management, merchant banking and digital investment solutions to families, entrepreneurs and business owners globally. Our clients are the reason we exist. That is why we work relentlessly from four Crossbridge Capital locations: London, Singapore, Monaco and Malta to deliver the best possible investment advice combined with the highest standard of service, to help them reach their goals.

Crossinvest (Asia) Pte Ltd Headquarters Singapore Founded Switzerland: 1985 Singapore: 2005 Branches Switzerland Licence CMS Licence Target Client Segment Demographic and geography agnostic. Crossinvest client segment include sophisticated individuals, entrepreneurial families and institutions. Company Website www.crossinvest.com.sg

Phone: Address:

+65 9220 9339 82 Telok Ayer Street, Far East Square #02-02

Company’s value proposition Crossinvest is a multi-generational family-owned group that exemplifies the finest Swiss Private banking traditions. An independent external private wealth management company offering bespoke and exclusive discretionary management, financial advisory and family office services to our family of clients. 2017 Best Independent Wealth Manager Asia (WealthBriefingAsia Awards) 2017 Best Discretionary & Advisory Offering (Private Banker International)

DC Wealth Management (HK) Limited Headquarters Hong Kong Founded 2014 Branches Hang Zhou Licence SFC Type 4, 9 Target Client Segment >HK$50 million, Hong Kong & Mainland China Company Website www.dcwealth.com Phone: +852 2157 9991 E-mail: info@dcwealth.com

Company’s value proposition DC Wealth Group (“DC Wealth”) is co-founded by senior bankers from Mainland China and Hong Kong, together with part of Alibaba Group’s founding shareholders and other investors. DC Wealth adheres to the “Today for Tomorrow” service philosophy, and aims to provide HNW individuals and institutional investors with family office, family trust, insurance, overseas asset allocation and many more wealth management services. DC Wealth insists on the “Client First and Striving for Excellence” principle. We are committed to providing our clients with highquality products and services, and realizing the long-term sustainable development of both clients and our company.

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Eightstone Pte Ltd Headquarters Singapore Founded 2014 Branches Geneva, Switzerland Licence CMS Licence Target Client Segment UHNWI ready to let us manage a minimum of US$10 million Company Website eightstone.com Tel: +65 6880 9288

Company’s value proposition Registered with the Monetary Authority of Singapore, Eightstone is an international private investment office that delivers customized service to a select number of wealthy families, based on conservative principles of investment and a multi-generational approach. Founded by experienced bankers and entrepreneurs, we are a 360 degree financial and wealth management firm. Eightstone is neither a bank, nor just a family office. Instead, we bring together the best of both worlds: the high service standards and transparency expected of a private family office, combined with the quality of investment expertise and operational excellence typically associated with a major global financial institution.

Fusang Investment Office Pte. Ltd. Headquarters Singapore Founded 2015 Branches Hong Kong, Labuan Licence Registered Fund Management Company (RFMC) Target Client Segment Family Offices and Institutions with permanent capital in Asia Key Personnel David Chong is the Executive Chairman of Fusang. He is also the Founder and President of the Portcullis Group that serves UHNW individuals and families in Asia.

Henry Chong is Chief Executive Officer of Fusang and a Director at Portcullis Group, Asia’s biggest independent group of trust companies. Company Website www.fusang.co Other Contact info@fusang.co Company’s value proposition Fusang is a private investment office that partners with families across Asia to provide conflict-free investment solutions and independent business advice.

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Guggenheim Investment Advisors (Hong Kong) Limited Headquarters Hong Kong Founded 2003 Branches As part of LJ Partnership we have offices in London, New York, Geneva, Miami, Lisbon, Isle of Man Licence SFC Type 1, 4, 5, 9 Target Client Segment Ultra high net worth individuals, families and related companies and foundations in Asia Pacific region. Generally, minimum portfolio size is US$20 million. Key Personnel Joshua M. Green Joshua is a Partner of LJ Partnership and Managing Director of GIA (HK) an SFC licensed asset manager and investment advisor. Prior to joining GIA (HK) in 2006, Mr. Green served as a Managing Director of Gottex Fund Management, a global fund of hedge funds provider, in their Hong Kong office which he opened. Gideon Kong Gideon is a Partner of LJ Partnership and Managing Director of GIA (HK) an SFC licensed asset manager and investment advisor. Mr. Kong has over 19 years of experience in the investment industry in Asia. Prior to joining GIA (HK) in 2003, he

worked for Credit Lyonnais Securities Asia (CLSA), where he spent 3 years leading the Asian convertibles research product. Company Website www.gia-ap.com Other Contact Guggenheim Investment Advisors (Hong Kong) Limited, Suite 3801 One Exchange Square,8 Connaught Place, Central, Hong Kong, Main: +852 3119 0135 Fax: +852 3119 0135 Email: giahk@gia-ap.com Company’s value proposition Guggenheim Investment Advisors (Hong Kong) Limited (“GIA (HK)”), is part of LJ Partnership, the global private wealth partnership, which supervises in excess of $14 billion on behalf of individuals, family offices, foundations, and charities. With offices in Europe, the US and Asia, LJ Partnership and GIA HK can offer our clients a seamless international service. Investment Services include: Asset Allocation & Risk Management, Consolidation & Reporting, Fee Reduction & Cost Control, Private equity and real estate co-investment, Corporate advisory. Non-investment services include: Trust & Fiduciary and Estate Planning & Succession.

* The Guggenheim/Guggenheim Partners name is used under a license from Guggenheim Capital, LLC and none of Guggenheim Investment Advisors (Hong Kong) Limited, Guggenheim Partners Latin America, Inc, Guggenheim Investment Advisors (Suisse) SA or GGH Partners Portugal SGP, S.A are owned or controlled by Guggenheim Capital, LLC or Guggenheim Partners, LLC.

HP Wealth Management (S) Pte Ltd Headquarters Singapore Founded 2009 Licence CMS Licence Target Client Segment HNW clients, minimum US$3 million, Europe, Asia Pacific Key Personnel Urs Brutsch After being instrumental in building three private banks (Credit Suisse, ABN AMRO and Clariden Leu) in Asia from 1986 to 2009, Urs has decided to build his own business as an independent asset manager/ family office with a total focus on the client. Urs is a co-founder of the AIAM. Michael Foo As CIO, Michael is responsible for driving HPWM’s investment strategies and discretionary mandates. He was Clariden Leu’s Asian DPM head when he left in 2009

to help establish HPWM. Michael obtained a Master’s from LBS and is a CFA charterholder. Stephane Schmid In July 2012, Stephane, a seasoned private wealth manager, joined Urs Brutsch and Michael Foo as a partner to strengthen the offering of HP Wealth Management (S) Pte Ltd. Stephane is a CFA chaterholder and holds a Master Degree in Finance from the University of Lausanne, Switzerland. Company Website www.hpwm.sg Address: 137 Telok Ayer Street, #08-05, Singapore 068602 Company’s value proposition We believe in providing truly independent advice to our clients, coupled with a totally transparent fee structure which aligns our interest with that of the client.

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IAM LEGACY LIMITED Headquarters Hong Kong Founded 2008 Licence SFC Type 4, 9 Target Client Segment High net worth clients, minimum US$3 million, Europe, Asia Pacific Company Website www.iamlegacy.com Other Contact enquiry@iamlegacy.com

Company’s value proposition We aim to be partnered with clients for the purpose of providing bespoke services and solutions to meet their specific needs, both as individuals, families and corporates.

JVSakk Asset Management Limited Headquarters Hong Kong Founded 2007 Licence SFC Type 4, 9 Target Client Segment Account size: US$3 million - US$100 million Client Type: HNWI & families Geography: Resident in CRS jurisdictions Key Personnel Sean Soo Company Website www.jvsakk.com Tel: +852 3983 1188 E-mail: info@jvsakk.com

Company’s value proposition We offer a family office approach in providing investment services, combining the advantages of both traditional private banking and asset management to sustain client’s wealth across generations. We employ buy-side mentality with services orientated mindset, sit on client’s side of the table and act in their best interests. Our extensive network provides collaboration with the best financial institutions, corporate services, law and accounting firms to serve family wealth. We help to set investment guidelines, family governance and risk management framework on both financial and family activities, build a professional infrastructure from a long-term perspective.

Lumen Capital Investors Pte Ltd Headquarters Singapore Founded 2010 Branches Jakarta Licence CMS Licence (Fund Management) Target Client Segment International UHNW & HNW families and individuals Key Personnel Wilfried Kofmehl Chairman, Founding Partner Wilfried has been in the private banking industry for over 30 years where he managed several key businesses in Europe and Asia for Swiss Banking Corp, UBS and Bank Julius Baer. Prior to founding Lumen Capital Investors, Wilfried was CEO of Bank Julius Baer Singapore. Jan Dirkmann Chief Executive Officer, Managing Partner A seasoned private banker, having commenced his banking career in 1996, Jan joined Lumen Capital Investors (LCI) as Chief Executive Officer in 2014. Prior to joining LCI, he was an Executive Director at Bank Julius Baer where he was the head of Independent Asset Manager Asia (Singapore).

Justin Lam Kean Kui Senior Advisor, Director Justin has more than 15 years of experience in wealth management and has a depth of experience across the various bank functions. Prior to joining Lumen Capital Investors, Justin was jointly responsible for managing clients’ portfolios in Bank Julius Baer Singapore together with Wilfried Kofmehl. Company Website www.lci.com.sg Tel: +65 6634 0112 Company’s value proposition We adopt a holistic and more “family office” oriented approach to wealth management that makes us fully accountable to our clients and allows us to craft customized solutions to best suit each of their needs. Our expertise covers all aspects of asset management, family office services and corporate advisory services.

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Marcuard Asia Pte Ltd Headquarters Switzerland Founded 2003 Branches Zurich, Cyprus, Moscow, London Licence CMS Licence (Fund Management) Target Client Segment Accredited Investors Key Personnel Sinan Bodmer, Co-Founder Sinan Bodmer is Marcuard Heritage Group Chief Executive Officer, a member of the Board of Directors of Marcuard Heritage Holding Ltd. and a member of the Group Executive Committee. He is also an executive member of the Board of Directors and the Chief Executive Officer of Marcuard Asia Pte Ltd.

Company Website www.marcuardheritage.com Other Contact Management, COO: armando.beer@ marcuardheritage.com Company’s value proposition We are your independent partner who develops solutions for the complex asset structures of the families and individuals we work with. Since 2003, our company has grown steadily to become a market leader despite the challenging conditions in the financial industry At Marcuard Asia we have developed an excellent network of international partners. Our network goes far beyond the traditional sphere of wealth management, spanning a wide range of experts – including leading financial, legal and tax, real estate and lifestyle advisors. Marcuard Asia and its partners complement each other perfectly which allows us to offer the best and most comprehensive services to our clients.

Schroders Wealth Management Headquarters London Founded 1804 Branches UK, Channel Islands, Germany, Italy, Spain, Switzerland, Singapore, Hong Kong Licence SFC Type 1, 4, 9 Target Client Segment We offer portfolio management and charity fund management to various charities and private clients. Our private clients are high net worth individuals with various requirements and individual preferences, but generally are focused on preserving and, if possible, growing their wealth for the long term. We are able to service (HK) resident and domiciled individuals as well as more complex cross-border family offices with associated advisers. We assist charities across all sectors with their investment management requirements. Key Personnel Sandy Dudgeon Head of Wealth Management, Hong Kong sandy.dudgeon@schroders.com +852 2843 7851 Sandy, a Chartered Accountant joined in January 2010 and was head of business development in the UK until becoming Head of Wealth Management, Hong Kong, in 2013. He is a member of CISI and HKSI.

Robert Ridland, Portfolio Director robert.ridland@schroders.com +852 2843 7852 Robert has an MA in History from Edinburgh. He joined in May 2006 and is a Portfolio Director with 11 years’ experience. He is a member of CISI and HKSI. Andrew Au, Portfolio Director andrew.au@schroders.com +852 2843 7855 Andrew joined in September 2014 as a Client Director, with a particular focus on charities. Andrew graduated from Imperial College London with a Master of Engineering (Honours). Company Website wm.schroders.hk Other Contact wm.schroders.sg Company’s value proposition All businesses say they are unique but we genuinely believe that we are due to: the stability of our ownership, the expertise and longevity of our staff and the ability to draw on the global expertise of our parent, Schroders plc. It is these strengths that enable us to put our clients at the heart of our business and take decisions with them and for them which match their precise needs and requirements. The Family ownership combined with our financial strength enables our dedicated client teams to work with our clients over the long term and to build enduring relationships.

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Strabens Hall (Hong Kong) Limited Headquarters Hong Kong Founded 2007 Branches London Licence SFC Type 4, 9 and HKCIB (insurance) Target Client Segment Internationally mobile executives, typically British or with a UK planning requirement. Our clients net worth typically ranges from US$5 million to US$50 million. Key Personnel David Snelling (Director) David is a founding director of Strabens Hall (Hong Kong) and an experienced financial adviser. For a significant part of his career he was based in London, advising corporate and international clients on planning and structuring of their financial arrangements as

well as their wealth management strategies. Company Website strabenshall.com/ Other Contacts David Snelling Tel: +852 5504 0005 Companyâ&#x20AC;&#x2122;s value proposition Strabens Hall are an independent financial planning and asset management firm. Core to our values is transparency and fairness which is why we aim to remove conflicts of interest where possible by operating on a fee basis. As a firm we hold Chartered status with several directors and advisers holding this qualification. We advise our clients on a number of key financial planning issues including retirement, tax and succession planning. Our other key service is helping clients to develop their investment portfolio by working closely with third party investment managers and private banks.

The Capital Company Hong Kong Limited Headquarters Hong Kong Founded 2017 Licence SFC Type 4, 9 and HKCIB (insurance) Target Client Segment Asset size: US$ 500K - US$50 million Geography: Europe, Asia and America Key Personnel Jessica Cutrera is a founding partner with expertise in many areas including tax, financial, and estate planning and she specializes in serving Americans living in Asia. Louis Lamaison is a founding partner and has been serving HNWI clients in Hong Kong for more than 17 years as a private banking and asset management professional. Harmen Overdijk is an expert portfolio manager with 20 yearsâ&#x20AC;&#x2122; experience. Prior to this company he held senior management and CIO roles at EFG

Company Website Other Contacts

Asset Management, Fortis Bank and MeesPierson. www.capital-company.com Tel : +852 3468 8880

Companyâ&#x20AC;&#x2122;s value proposition The Capital Company is a HK based independent asset management firm offering global and Asia-specific investment strategies to international investors. The partners draw on years of experience in the financial industry and have a strong, long-term presence in Asia and financial services backgrounds from Europe, Australia and US. We specialize in wealth management, portfolio strategies for high net worth western and Asian families with a focus on Evidence Based Investment strategies. Our clients include successful professionals, investors and entrepreneurs in Asia, and we provide a comprehensive suite of services, including asset management, estate planning, insurance, personal goal-based planning and tax planning.

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Thirdrock Headquarters Singapore Founded 2010 Branches Hong Kong Licence CMS Licence Target Client Segment Thirdrock serves UHNW individuals and families as well as corporate clients globally. Key Personnel Jason Lai Jason founded Thirdrock in 2010 is Chief Executive Officer. He has managed billions in assets cumulatively during his career and has extensive and in-depth professional experience in multi-asset class investing. Melvyn Yeo Melvyn came onboard as Executive Partner after a decade-long career in Goldman Sachs (Asia). Melvyn’s experience includes direct investment advisory and portfolio management for UHNW Asian clients and family offices.

Company Website www.thirdrockgrp.com Other Contacts Tel: +65 6922 0750 Fax: +65 6922 0759 Company’s value proposition An award-winning independent investment manager, Thirdrock leverages the IAM platform to tailor strategic and comprehensive investment solutions across all asset classes for our clients on a discretionary or advisory basis. Beyond wealth management, Thirdrock’s investment capabilities also include funds management and corporate advisory services. Through our funds platform, clients can access fund strategies and fund advisory services including fixed income and global multi-asset mandates. Backed by a comprehensive technology platform powered for high-impact investment insight, portfolio analysis and client management, Thirdrock aims to be APAC’s leading independent investment management firm for investment professionals and clients on every measure.

TriLake Partners Pte. Ltd. Headquarters Singapore Founded 2011 Licence CMS Licence Target Client Segment Accredited investors Company Website www.trilake-partners.com Other Contacts info@trilake-partners.com

Company’s value proposition We provide discretionary and advisory investment management services to high-net worth individuals as well as family office services.

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Venture Smart Asia Limited Headquarters Founded Licence Target Client Segment Key Personnel

Hong Kong 2015 SFC Type 1, 4, 9 HNW clients in Asia Lawrence Chu, Founder and Vice Chairman Lawrence Chu has over 15 years of investment experience and previously worked in UBS Investment Bank and UBS O’Connor. Chu is also the founder of BlackPine, an investment firm which has deployed US$ 1.5 billion in Greater China over last 10 years. Ulric Leung, Vice Chairman Ulric Leung is a deeply engaged leader with extensive industry knowledge and strong investment insight to help achieve optimal return. He has over 25 years of working experience in renowned financial institutions. Desmond Liu, Executive Vice Chairman Desmond Liu is a financial services

industry leader and seasoned practitioner in private banking. He has a wealth of over 35 years’ experience in managing start-ups and mature businesses in banking and financial institutions, and served as head of private banking in major banks in Hong Kong. Company Website www.v-smart.com.hk Company’s value proposition Venture Smart Asia Limited (“VS Asia”), working on a private bank model, is a licensed corporation by Hong Kong SFC to engage in Type 1 (dealing in securities), Type 4 (advising in securities) and Type 9 (asset management) regulated activities. VS Asia provides Wealth Management (“PAM”) and Asset Management (“IAM”) services for high-net-worth individuals and institutional clients respectively: PAM PAM is under Crosby Wealth brand name. Renowned for the extensive connections with HNW clients, VS Asia has formed strategic alliance with CREDIT SUISSE HK and CROSBY as an external manager under PAM businesses. IAM Focusing on Private equity funds covering Greater China, Blockchain, Artificial Intelligence, Credit and Real Estate, as well as direct co-investment opportunities for clients.

Winland Wealth Management Limited Headquarters Hong Kong Founded 1970 Licence SFC Type 1, 4 (unconditional) + Exchange Participant Target Client Segment High to ultra high net worth individuals and families Key Personnel Keith Wong Chief Executive Winland Wealth Management Limited With over 25 years of experience in wealth management, he has been with multi-national institutions including HSBC, Bank of America, ABN Amro, RBS and Coutts & Co. He understands the importance of offering innovative products and services as a business and believes that the success of a good wealth manager is based on the foundation of long

term relationships with its clients through effective support and trust. Company Website www.winlandwealth.com Other Contacts tel: +852 2882 0066 email: enquiry@winlandwealth.com Company’s value proposition Being truly independent, with own custodian capabilities and a vast product range, we have no obligations to any financial institutions, allowing us to give unbiased advice to our clients that can best fit their investment goals. Embracing the future, we adopt high-end financial technologies such as machine learning and artificial intelligence to service and assist clients in making optimal investment decisions. Our trustworthy and knowledgeable advisors are trained to listen, understand and through working together with our clients, provide simple yet focused solution that can cater to their holistic wealth management needs.

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