CEO and founder
London & Capital Asia
Q. How has the industry changed over the years?
Nowadays, you’re not spending most of your time explaining how we fit within the industry; you are talking about how it’s growing. When we started in 2010, I remember there was an article in the press that said I was committing career suicide for leaving the banks and setting up independently. Now articles say it is a career option for senior relationship managers looking for the next step.
However, I am still debating what an independent asset manager (IAM) means. We founded the Association of Independent Asset Managers in Hong Kong with two other firms in 2015. About eight months after founding the organisation, we resigned. One of the issues was that we did not resonate with what the members wanted the association to be or say; too many people wanting too many different things, and being a nascent activity in Hong Kong, there were too many business models under one umbrella.
Q. What is your business model?
We view ourselves as a multi-family office. We compartmentalise our operations into three activities.
The first is managing liquid and illiquid assets for a complete wealth management offering.
The second is corporate advisory solutions for the family business. We offered this service from day one knowing Asian entrepreneurs have difficulties in obtaining sound advice if the size of their family businesses is not big enough to interest the large investment banks.
The third is a continuation of the first two activities, offering family governance guidance and providing a forum to source answers to numerous non-financial issues, such as succession and generational transfer, legal structuring, immigration, family charters and so on.
Q. How big is your relationship management and investment team?
We have eight people in total in our Hong Kong office, but we also have a joint venture partner in London with 100 people.
Q. How do you work together as a group?
When we set up the Asian company, we strongly believed in the benefits of an investment advisory cycle with robust processes. This is what we obtain through the group’s chief investment officer and his investment team of 12 that carry out both primary and secondary due diligence on all asset classes. He creates the macro overview that generates the house view.
Q. What is the split between discretionary and advisory assets?
About 55% of our clients have given us a discretionary mandate; they include clients who don’t have the time to invest or don’t have the interest to do so; it also includes professionals who like to have a third party do the investments thus facilitating their full adherence to their internal compliance oversight.
Nowadays, you’re not spending most of your time explaining how we fit within the industry; you are talking about how it’s growing’
Q. How do you charge clients?
For our discretionary accounts, we charge a management fee as a percentage of the assets. For advisory mandates, although European clients are open to the concept, Asian clients still prefer to only pay transaction fees on which we get a retrocession that is fully disclosed.
On the corporate advisory side, we charge clients a retainer for us to investigate the deals but most of our income is based on a success fee.
For family governance, we generally charge a fixed fee depending on the nature of the mandate.
Q. Where are your clients from?
Our clients come from Asia. They might not always be ethnically Asian but they view Asia as home. We also take on US clients if the family happens to include US citizens because we don’t want to leave them out in the cold.
Q. What’s your growth strategy?
Organic growth, but the question is: how do you attract and retain talent? We are competing in a limited talent pool with financial institutions that have a bigger brand name and deeper pockets. Hence the importance of our family office business model to attract talent that are looking for a different opportunity.
We also partner with lawyers and accountancy firms that offer complimentary services to us. They are also targeting the family office space.
Q. How are you advising clients on cryptocurrencies and blockchain?
On crypto, we would say it’s too early to judge who is going to win. Our job is not to guess the next big cryptocurrency. It’s wealth preservation. Blockchain is a completely different and new concept and I’m a very strong believer that it will change the landscape.
For clients who really want to invest, even though we don’t recommend it, we always favour diversification and hence funds as a ‘side bet’ but not a core holding.
Q. What cybersecurity measures have you undertaken?
The number-one threat is your link to the outside world, which today is your devices and web browsers. With that in mind, we outsource IT and pay to have the most updated security. We also block certain things, so there is limited ability to put in a disc or USB drive into our computers in the office.
The second is constant awareness of the team from potential dangers. We maintain staff awareness and have created policies around this.
But what I’ve noticed from attempted hacks is that it generally goes through the clients themselves. Most of the issues don’t occur within the institution but through clients’ use of free emails services such as Google or Yahoo that have limited security and are often open to hacks.
Q. What are some new regulations you’re watching?
Families might have skeletons in their cupboards. It could be as simple as a nominee account within the family that is not known to every family member but whatever it is, they need to understand what these skeletons are and deal with them. With the Common Reporting Standards and FATCA, everyone must understand that transparency within an international regulatory framework is now a fact for all to deal with. This means making the required changes to ensure that the affairs of the present and next generation are totally in line with today’s transparency approach and regulatory environment.
Q. What is the most unusual request you’ve received from a client?
A few years back an Indian family was preparing, well in advance, for an important party in Mumbai and had problems getting original Dom Perignon champagne. So she wanted us to come and see her often so we could bring her our quota of champagne each time!