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Industry
Crisis tests PBs’ commitment to clients and markets: DB WM’s Lynn Hermijanto
The pandemic may have wrought unprecedented challenges to the world economy, but Lynn Hermijanto believes that this is the time for a truly committed private bank to shine by ‘handing the umbrella to clients in rainy days’.
“There’s a saying that goes: ‘Never waste a crisis’,” explained Lynn Hermijanto, managing director, Southeast Asia wealth management coverage at Deutsche Bank Wealth Management in an interfview with Asian Private Banker. “One of the things of which we are really proud, in terms of helping clients this year, is the fact that when things were in total flux — with fear stricken people working from home, and credit markets dislocated — we were able to put together a US$600 million financing package in six weeks for a Singapore client who was looking to refinance a large commercial real estate asset in the US.”
Lynn Hermijanto, Deutsche Bank “It required us to be extremely client-centric, working with the real estate team in the US and the credit team in London — in addition to connecting to colleagues in investment banking, as well as coordinating work with external legal and tax counsels.”
Hermijanto vividly remembers the circumstances in which the transaction was done: “It was at the height of the COVID-19 pandemic in New York City in March. The market was at the pinnacle of distress, and yet our team was relentlessly trying to bring together a solution for the client.”
She continued: “Another notable win was a complex US$700 million structured bridge loan facility we packaged and syndicated for an Indonesian name. At the heart of all we do, we aim to work together, across divisional lines, coming together as a team to deliver real impact and tailored solutions to key clients. We are absolutely focused on onebank delivery at Deutsche Bank.”
What shines through during the hour-long conversation, is Hermijanto’s passion for her work — the meticulous details of how to nurture longterm relationships in the exquisite circle of UHNW families in Southeast Asia; her intricate web of connections with teams across the entire
bank and at management level; and the minute understanding of how institutional-like transactions can be exclusively offered to this tier of sophisticated clients whom she serves in times of great volatility.
“Earlier this year, we actively identified and sought to capture positive basis trades by recommending suitable clients to switch out of bonds and move into CLNs [credit-linked notes],” she confided. “I think these are ideas that are more institutional-like — versus your typical ‘let’s buy this bond, let’s do these ELN [equity-linked notes], let’s sell the stock’”. “We take on a very different approach in generating alpha for our clients. We try to hunt and show opportunistic ideas that we believe no one else in the market is showing yet.”
A corporate commitment to excel
Following Indonesia’s tax amnesty programme in 2017, there have been shifts in the country’s offshore market. IDR 4,881 trillion worth of assets has been disclosed and some IDR 147 trillion of assets repatriated onshore, posing challenges to the offshore business of some private banks.
While there has been an increase in investing money onshore over the last four years, Hermijanto has also seen an unprecedented surge in family office creation and multi-family office structures in Singapore, symbolising the upward trajectory of continued offshore wealth generation by Indonesian UHNWs.
“UHNW clients increasingly see the value of having more defined investment processes and being more methodical in portfolio risk management. Additionally, they now understand the need for proper structures and clear processes to cope with global regulatory demands.” In order to serve the most prestigious class of clients in the country, Hermijanto said her mandate is to “go after the most influential families and do everything we can for them as a firm, and let’s work to invest, nurture and build the right relationships that will last for a really long time”.
“You need people who are focused on relationships,” she stressed. “And they need to be in a bank with a culture that says: I want to be with this market, I’m focused on pulling resources for this market, and I have a long-term view when cultivating the right relationships in the market in which I want to establish a foothold.”
A friend in need is a friend indeed
According to Hermijanto, the key to sustainable and prosperous business in Indonesia (and that might just as well apply to other Southeast Asian frontier markets) is to be willing to offer the necessary help when clients reach out to the bank with funding needs; to show long-term commitment to the particular geographical market, even in times of economic turbulence.
“My largest relationship summarised it very well: You know Lynn, when the skies are blue and the sun is out, everyone wants to lend me an umbrella and be my friend. But when it rains, who will extend an umbrella to me?. His point is that, in any relationship, the strength of the partnership is only tested during hard times. It is during the most difficult and challenging times that the truth is revealed,” explained Hermijanto.
In deciding wallet allocations to banks, my clients do look beyond mere pricing advantages. To them, there are more important strategic considerations: Will this bank stick around? Are they committed to this relationship? Can they be counted upon when help is needed?,” she said.
“I would say that sometimes, establishing market presence is easy. But being able to stay in that market successfully and be in tight partnership with the client over periods of time, that is the challenging bit. That requires real commitment and endurance, as well as an authentic focus on building long-term relationships. This isn’t something I personally struggle with because Deutsche Bank is committed to Southeast Asia. Indonesia is a strategic market for us in wealth, and a key market for investment banking.”
