Citywire Asia (12.09.2022) - Singapore’s growth as a family office hub is an opportunity for Union Bancaire Privée (UBP), which has been historically associated with them in Europe.

In an interview with Citywire Asia, Ranjit Khanna, head of South Asia and Singapore branch chief executive at UBP, said: ‘We have certainly benefited from the growth of this segment. We are in the right place at the right time and for us this is the ideal moment to showcase the whole of the UBP platform to this fast-growing opportunity.’

The Swiss private bank has set up four pillars to help ultra-rich clients planning to set up family offices. These include administrative assistance, setting up a family constitution, and wealth and legacy planning.

He said the bank’s strength was in providing a competitive investment platform. ‘Across Asia, for our ultra-high-net-worth families and single-family offices, working closely with our asset management arm as an integral part of the group is a real benefit to be able to draw on. While we have a completely open architecture platform, our asset management service is a key resource that gives strength to our overall platform,’ he said.

Growth strategy

While China had been a growth engine for UBP, Southeast Asia and the non-resident Indian diaspora spread across the region, including the Middle East, continue to play a dominant role.

If you want to be successful in Asia, you must make sure that you have a fit-for-purpose investment platform and solutions to meet client requirements; it is simply essential to align with client needs.

Khanna said that the firm had the right proposition and that its working relationship with its asset management teams in Hong Kong, Shanghai, Taiwan and Japan added ‘tremendous value’ for clients.

Having the right people is also an important factor for success. UBP continues to take on senior talent which has helped further its business ambitions in Asia. ‘For us, it is not merely about adding headcount to meet KPIs (key performance indicators), but about onboarding quality, senior staff who are value-accretive for our clients and will be there to help us build a long-term, sustainable business’ he added.

Unlike other private banks that have started catering to the affluent class, UBP continues to be wealth-focused. The bank’s strategy for the ultra-high-net-worth families and family offices has been very clear and that is what the clients expect, said Khanna.

Investment outlook

As Asia comes out of the pandemic, Khanna said the financial markets were going through a reset. Given rising inflation and recessionary concerns, the markets are heading into a slow growth rate.

While we believe positive momentum will return, we will now go through a period which will define the new normal. If clients have been doing passive investment management, going forward they will have to be more actively involved. So, by default, partnering with experienced advisors becomes even more critical.

He expects headwinds towards the end of this year and early next year, and as that plays out people’s asset allocation strategies will change dramatically.

UBP believes it is important to be associated with quality companies that have strong balance sheets. It also advises building asymmetry in the portfolios to protect against violent swings and looking at absolute return strategies.

Equities and fixed income have always been preferred asset classes with a typical 60:40 portfolio. ‘We have seen fixed income come back to some degree as interest rates have risen, but increasingly clients have also built asymmetry within their portfolios through structured products. In terms of investments, we are also looking at hedge funds and alternatives,’ he said.

With growing interest in private markets, UBP has been focusing on offering unique opportunities to its clients. Clients were able to invest in government-owned or leased properties in the US or participate in part-ownership of the EU headquarters in Brussels.

Besides alternatives, the firm has succeeded with its discretionary portfolio management (DPM) strategy. ‘We have a particularly strong asset allocation proposition and almost two-thirds of our clients are looking to add breadth and depth to their portfolios. They can opt for either our direct, bespoke DPM mandates or select a unitised fund version of our house view which we launched in 2021 specifically aimed at clients in Asia. The participation and interest in the latter have been phenomenal,’ he added.