Fusang Family Office
Q. Tell us about your firm
We started Fusang in 2015 as a standalone unit. Our roots go back 35 years to the Portcullis Group, which has been serving families for a very long time now. We set up Fusang because we wanted it to be an extension of my own family office and serve the needs of families more holistically.
At this point, our client base is mostly Asian families, but we are seeing an increasing number of foreign families.
Q. What is the make-up of your staff right now?
Most of the people within Fusang are investment-focused because Fusang holds fund management licences in Singapore and Hong Kong. The investment team is run by two managing directors in Singapore. We have a total of five people in Singapore. I sit in Hong Kong. We use Labuan for some of our offshore structures and access to offshore fund managers.
Q. How many custodian banks do you work with?
We work with every custodian bank in the world except ones that fail to meet our due diligence process.
Q. How do you charge clients currently?
It is really varied across the firm. For some of our services, we charge fixed fees or various structures, like in the case of fund administration, for example. For investment management, we charge them based on the percentage of assets we manage. One principle for us is that we never take third-party retrocessions or commissions.
Q. Do you take performance fees?
There are different fees that are associated to various services that we offer our clients. In some contexts, we think it is good to align interests with performance fees.
For many clients, their need is: ‘I want this part of my assets to be safe and stable.’ Obviously the more returns the better, but that is not their first priorityHenry Chong
Q. What contexts would these be?
For many clients, their need is: ‘I want this part of my assets to be safe and stable.’ Obviously the more returns the better, but that is not their first priority. The first priority is that we cannot lose their money, ever. They don’t want to see a down month ever. It is a very common request from clients. In those cases, we don’t think it aligns interests to charge performance fees because then we have the incentive to maximise returns.
Q. What is the split between discretionary and advisory accounts?
When we manage assets, it is always discretionary.
Q. Which service provides the most revenue for Fusang?
Fusang’s core business is investment management. Across the group we have other entities that provide a full platform or services to families.
Q. What other entities do you have?
We help families from a legal structuring perspective in terms of providing advice on how families should think holistically about things like governance, fund administration, legal advice and so on.
In Asia, we find that most families still run large operating businesses. In fact it is rather rare to have the family who has had a liquidity event and is purely managing liquid assets. For many of them, their key need is preserving the family wealth across generations. Some of that is how to deploy assets and do investment management, and some of it is how to set up structures to ensure the legacy continues by keeping the assets and family together.
Q. How are you advising clients on cryptocurrencies and blockchain technologies right now?
My personal view is that digital assets are the future and that more and more assets will be tokenised in some form. Remember the time when there was an electronic trading ‘session’? We don’t talk about that anymore, it is just equities trading. The same thing will happen with digital assets – all these labels will drop away and it’ll just be equities trading again. We absolutely think that digital assets will be the way in the future.
I think digital assets will be broader than cryptocurrencies as an asset class or even blockchain as a technology. What we are interested in is looking at how all of these technologies will fundamentally impact in the way the financial industry operates. We are very interested in that space. That said, I think the space right now is still very new.
Q. What’s the firm’s growth strategy? Are you looking to acquire other firms or open up to new markets?
We think we can continue to grow organically. Also, Asia today is the focus of the world in many ways. We don’t feel any particularly pressure to expand outside of Asia. Sitting primarily in the hubs of Hong Kong and Singapore, these are financial centres that are growing at an increasing rate. So we are very lucky in the sense that people are coming here to look for us. We don’t necessarily feel that we need to go there and look for them.
Q. Have you introduced any digital initiatives?
Everything we do today – the way in which we work, store data, manage money and make transactions – all of it is 100% digital. For example, we have provided account consolidation tools for a very long time. To me it is a base layer. If you don’t know where your accounts are and you don’t know how to look at your total asset base, you don’t have much of a starting point to even begin thinking about how to manage money.
However, we don’t have client-facing tools like portfolio management systems. At least for now, the kind of clients that we serve, we do think that having that personal contact with them is imperative.
Q. What are the new regulations you are watching at this point?
There are a lot of disclosure-related regulations that are emerging. It is nowhere near as vigorous as Mifid II, but I think they can – and should – come and I strongly support those kind of disclosure requirements.
More broadly across the industry, I think there is a lot of financial intermediation going on. There are a lot of new businesses – fintech or otherwise – that are springing up to do different types of financial services, and obviously regulators are exploring how best to treat them. I absolutely think that blockchain will change the way financial firms operate, if not their businesses, though not in terms of the actual fulfilling client needs.
Q. What are some investment opportunities you’re offering clients?
Right now we think that trying to time the markets is very difficult. We spend a lot of our time looking at things like alternative credit to understand how to deploy money or lend money to get fixed rates of return.