Best Private Bank — Asia Pacific

CARRET PRIVATE

Following the strategic alliance with Singapore’s Lumen Capital Investors in 2019 and the acquisition of CSOP’s multi-family office business in 2020, Hong Kong-based independent wealth manager Carret Private carried its impressive recent growth trajectory into 2021.

But the mettle of Carret Private, which provides investment management and related services to family offices in the region, was truly tested last year amid choppy markets.

While 2021 was a volatile year for equities and bonds across Asia-Pacific, a proposed portfolio by the firm still achieved a high single-digit return, according to data seen by Asian Private Banker’s judging panel. More important, however, is Carret Private’s long-term success in generating out-performance for clients. Annualised returns in recent years coming in significantly higher than a portfolio comprising 50% global equity and 50% global bonds, with lower maximum drawdowns and a higher Sharpe ratio.

Carret Private differs from many of its peers in that it takes a client-centric approach to portfolio construction. The wealth manager does not believe in timing the market or taking top down views on asset classes, but instead takes into account risk tolerance, return expectation and liquidity requirements to deliver customised portfolios that withstand drawdowns and deliver long-term returns. Against a backdrop of sky-high valuations for traditional asset classes, Carret Private is a firm believer in the importance of alternative investments as a driver of alpha, and has proved its ability to tap industry connections to source exclusive deals in this area for clients.

But all of this would mean little if it did not equal improved business performance for Carret Private. According to figures shared during the judging process, the firm enjoyed robust growth in AUM during the period under consideration, with the majority of this rise coming from new client assets rather than just investing prowess.

Kenny Ho CEO and managing partner, Carret Private

“As a firm, Carret Private has been fortunate to be able to build a foundation of highly experienced investment professionals who all follow and abide by the principles in which we manage our client assets.

This award from Asian Private Banker, the leading Asian publication, is a true testament to the people which have built this firm and the principles for which we stand. ”

- Kenny Ho, CEO and managing partner, Carret Private

Perhaps most impressively, a significant proportion of the inflows came from new accounts. While Carret Private admitted that limits on travel due to COVID-19 made the process of new account openings difficult in 2020, the wealth manager took full advantage of a relative easing in restrictions in the region last year to actively engage with prospects and onboard clients.

Those new client assets gathered in 2021 have already started feeding through to Carret Private’s top-line, with the bigger asset base translating into higher revenues. The wealth manager also enlarged the proportion of its revenues derived from more stable recurring income sources, such as discretionary portfolio management, during the year.

The icing on the cake, if one were needed, is that the upturn in business performance coincided with a significant improvement in Carret Private’s cost-toincome ratio. That was partly down to the larger revenue base, but the firm has also cut costs via organisational streamlining and restructuring, as well as making tentative investments in digitalisation and automation.

These are the reasons why Carret Private has been chosen by Asian Private Banker as the Best Independent Wealth Manager – Asia Pacific for 2021.

Greg Hingston CEO, HSBC Global Insurance and Partnerships and interim head of Wealth and Personal Banking, South Asia

HSBC GLOBAL PRIVATE BANKING

For Asian Private Banker’s inaugural Awards for Distinction – Wealth Continuum accolade, one bank stood tall above its peers in terms of providing a seamless client experience and services across the entire wealth spectrum — from mass affluent to HNW and UHNW.

During 2021, HSBC accelerated a major pivot to Asian wealth that has seen the bank hire hundreds of fresh faces in order to serve clients running the length and breadth of the wealth continuum, from Private Banking, to Jade, and Premier.

That was coupled with a dedication to boost products and services. Among its enhancements were the launch of a six-step digital investment account opening procedure for Premier clients in Hong Kong, Singapore and India — enabling them to open an investment account digitally and subsequently start investing on their mobile device within 24 hours — as well as a first-in-the-market digital portfolio advisory service in Hong Kong and a tailormade private fund solution for HNWI clients.

Over the last 12 months, HSBC extended Lombard lending services along the client continuum. In addition, Wealth clients in Hong Kong and Singapore were able to benefit from enhanced portfolio analytics following the launch of the Aladdin Wealth platform for these account holders.

All of those efforts paid off in the form of strong business performance across Wealth client segments during the period under consideration, with revenue, AUM and net new money (NNM) all demonstrating robust growth. On the NNM front, this was driven by a balance of new client acquisitions and referrals from within HSBC. The boost to the top line was thanks to healthy inflows into mutual funds and equities.

Other landmarks for HSBC’s wealth continuum business in the region during 2021 were improvements to its

“The past twelve months have been formative for our wealth business in Asia and the delivery of our Asia Wealth strategy. With this, we are bringing a differentiated model to serve the full spectrum of clients’ needs along the wealth continuum — from first-time investors to UHNW entrepreneurs and families.

This model sets us apart as the trusted partner who evolves with clients as they progress through their life stages, combining our unparalleled international network, robust balance sheet, leading capabilities as a global trade, commercial, corporate and investment bank, and in-house manufacturing expertise.

By harnessing our inherent strengths and connectivity as a global universal bank, we are bringing the best of HSBC to deliver a wealth experience which helps all customers achieve sustainable prosperity.”

- Greg Hingston, CEO, HSBC Global Insurance and Partnerships and interim head of Wealth and Personal Banking, South Asia

digital offerings. In August 2021, HSBC GPB rolled out its messaging platform — powered by Symphony — to facilitate RM-client communication via instant messaging platforms such as WhatsApp and WeChat. The bank has so far seen strong adoption of these platforms.

Other digital upgrades for HNW clients in Asia include providing access to its online trading platform to trade cash equities, ETFs, and FX. According to figures shared by HSBC with the judging panel, wealth transactions via digital channels exhibited a significant increase during the period under review.

This is why HSBC Global Private Banking is Asian Private Banker’s Best Private Bank – Wealth Continuum for 2021.

UBS

For discretionary portfolio management (DPM), 2021 proved to be the year these strategies came of age among Asia-Pacific’s private banks.

Penetration rates, both in terms of client base and AUM, rose sharply across the region among the major industry players during the year as volatility in markets such as China led clients to realise the importance of more systematic and disciplined investment, reducing some of their DIY portfolios in favour of managed solutions.

Nowhere was this more the case than at UBS, with the Swiss universal bank benefiting from a wave of inflows into its DPM strategies in the region, backed by robust performance of its mandates and continuous innovation.

Among the enhancements made to UBS’s DPM offering in 2021 were an increase in sustainable investments exposure in its traditional offering from 5% to about a third of globally diversified portfolios. In another move to boost its sustainability offerings, the bank launched an emerging markets sustainable finance strategy that uses fixed income solutions to assist in bridging funding gaps in the developing world and contributing to the UN’s Sustainable Development Goals, a strategy launched in partnership with currency manager Record.

These innovations would have mattered little if UBS’s mandates had failed to deliver robust returns to clients. However, return data provided by the bank showed that global multi-asset, global equity and global fixed income discretionary mandates all generated meaningful alpha during 2021, topping corresponding numbers provided by others in the market. Performance last year was boosted by profitable tactical calls, including an overweight for global energy to capitalise on easing travel restrictions and a long NZD-EUR position on an anticipated divergence in interest rates. Such calls get seamlessly integrated into clients’ discretionary mandates.

The Swiss bank’s DPM offering happens to be supported by the most intuitive and innovative digital platform in the market. Launched in 2020, UBS [My Way] offers clients

Adrian Zuercher co-head CIO Global Investment Management, UBS GWM APAC Monica Chatterjee co-head CIO Global Investment Management, UBS GWM APAC

“I am thrilled that our team has been recognised for its industry leading portfolio management capabilities. Mandates are the core of our value chain and are a centre piece for UBS to differentiate itself from the competition by delivering superior returns. I am very proud of what we have achieved and a big thank you to the team for getting us this far.”

- Adrian Zuercher, co-head CIO Global Investment Management, UBS GWM APAC

“By showcasing UBS [My Way] and our SI mandates, we successfully demonstrated how we are delivering on both our UBS purpose and Client Promise. Our ability to seamlessly encapsulate all elements of both resonated with the judges. This award is made possible with everyone’s hard work in delivering superior mandate solutions.”

- Monica Chatterjee, co-head CIO Global Investment Management, UBS GWM APAC

more than 50 investment ‘building blocks’ to craft their portfolio, ranging from US equities, to hedge funds, to ESG themes. Clients, if they so choose, can construct their personalised DPM strategy in a matter of minutes. While most prefer the guidance of their client advisors to build their My Way portfolios, the platform comes with a smart digital interface that hints at the future of portfolio construction.

Ultimately, the proof of the pudding is in the eating when it comes to the performance of UBS’s DPM business in the region. Comparing figures shared with Asian Private Banker for 2021 versus the prior year, UBS saw a significant rise in DPM penetration both in AUM and number of clients accounts, supporting a large increase in assets held in these strategies in the region.

That is why UBS is the winner of Asian Private Banker’s Best Private Bank – Discretionary Portfolio Management award for 2021.

CARRET PRIVATE

In a world where many of the major asset classes are teetering at record high valuations amid torrents of monetary stimulus, Carret Private is taking a very different approach to preserving and growing its clients’ capital.

The independent wealth manager, which focuses on serving family offices across Asia, takes a client-centric approach to portfolio construction. Rather than drawing up a portfolio that takes a top-down view on asset classes, Carret Private instead amalgamates clients’ risk tolerance, return expectation and liquidity requirements to deliver customised portfolios that withstand drawdowns and deliver long-term returns.

The investment team at Carret Private does not believe in market timing or individual stock picking, but rather shaping the equity portion of any portfolio around capturing alpha via secular trends such as the digital economy and ageing populations. For the fixed income components of its DPM offerings, Carret Private takes the view that structural near-zero interest rates have diluted not only return potential but also any diversification benefits and so instead uses low-cost ETFs to give clients exposure to quality Asian investment-grade issuers and select high-yield names.

But it is on the alternative investments side that Carret Private has excelled in delivering alpha to clients. Through its industry network, the independent wealth advisor has been able to source private equity deals and hedge funds not typically available to traditional private bank clients. While Carret Private is strategy agnostic, it has consistently proved itself capable of sourcing hedge fund managers with a track record of outperforming the market and peers on a risk adjusted basis. Performance data shared with Asian Private Banker showed that a basket of hedge funds chosen by Carret Private delivered better annualised returns than a 50% global equity, 50% global bond portfolio with a much lower average drawdown and a higher Sharpe ratio.

Kenny Ho CEO and managing partner, Carret Private

“Strategically, Carret Private has been increasing the resources it invests in discretionary portfolio management, which has resulted in even better and more consistent, risk adjusted returns.

As an added bonus, we are very excited to receive this tremendous honour from Asian Private Banker, the leading wealth management publication Asia.”

- Kenny Ho, CEO and managing partner, Carret Private

By investing its own capital alongside that of investors, the approach of Carret Private’s management to DPM benefits from a significant alignment of interests.

That philosophy helped to generate significant alpha for Carret Private’s DPM clients during the period under review. A global equity-focused portfolio constructed by the independent wealth manager significantly outperformed the MSCI World Index on time frames including one-, three- and five-years. A global multiasset portfolio built by the firm has likewise generated impressive relative returns for clients.

According to figures shared with Asian Private Banker during the judging process, Carret Private’s penetration rate for its DPM strategy — both in terms of its client base and the AUM — was the highest among all submissions. The judging panel was equally impressed by the overall net inflows into Carret Private’s DPM strategy and its return on assets during the period under consideration.

That is why Carret Private is named Asian Private Banker’s Best Independent Wealth Manager – Discretionary Portfolio Management at the 2021 Awards for Distinction.