Q. Tell us about your firm
We started in Singapore in 2011 and now have a team of 16. We have four portfolio managers and five relationship managers (RMs). Our investments are mainly focused in Asia. We invest in emerging high yield Asia fixed income and Greater China and Southeast Asian equities.
Q. What is your business model?
We have two activities – wealth and asset management – and we typically service clients with accounts above $5 million.
We set up some funds in June 2016 because we had requests from European clients who wanted to allocate a portion of their assets in Asia but did not want a fully discretionary mandate. Our funds are plain vanilla strategies and will provide better diversification for those with accounts below $5 million. In Asia, fixed income ticket sizes, for instance, tend to be about $100,000 to $200,000, so it’s hard to achieve a properly diversified portfolio with smaller account sizes.
We also have business partners. We are able to link clients interested in private equity, art investments, precious metals, and trust and corporate structures with our trusted partners.
Q. How do you charge clients for these funds?
We do not double charge fees to our clients. The portion of management fees on our funds will be discounted from our discretionary management fees to clients on a quarterly basis. Only around 15% of our existing assets are invested in our internal funds.
Q. What are some recent developments at SingAlliance?
In August 2017, we set up a subsidiary of SingAlliance in Geneva. It’s a smaller team there but we should have 10 people by the end of 2018. The Geneva team is more dedicated in terms of knowledge on Swiss and European investments and will be able to provide on-the-ground expertise to Asia-based clients who want exposure to those markets.
We have a joint investment committee with our Swiss subsidiary.
Q. Where are your clients from? Where are your clients from?
In Singapore, about 85% of our assets are from international clients based in Asia. We also have clients from around the region and we are well-positioned to cater to them as we have Japanese, Malaysian, Singaporean, Taiwanese and Swiss representatives.
Q. How are you charging clients?
The fee structure depends on the strategy. Our business model is based on management fees. We normally charge a fixed management fee for a conservative portfolio and a mix of management and performance fees for growth and balanced portfolios.
We take retrocessions when offered, but it’s not a priority. We try to remain concentrated with the custodian banks we work with so that we have scale to negotiate better pricing.
We don’t advise on cryptocurrencies because it will remain a grey area until there is government regulation around itThierry Beck
Q. How are you advising clients who are keen in investing in cryptocurrencies and blockchain?
We don’t advise on cryptocurrencies because it will remain a grey area until there is government regulation around it. Monetising digital coins can also be very complicated.
Q. What is your growth strategy?
We’re looking at expanding in Europe either through organic growth or acquisition. In Asia, we are not actively looking but if we have the opportunity to set up in Hong Kong, we will. In the medium term, we will be looking into mainland China but it’s remain complicated as of today with the existing regulations.
Q. What precautions are you taking to ensure the security of clients’ data?
IT is something that we’ve invested heavily into. We have firewalls and segregated servers and our system has been set up to counterattack cyber threats.
Q. Have you introduced any digital initiatives?
We have a portfolio management system (PMS) which does portfolio rebalancing. Clients can access our system on their mobile to view their portfolio or chat with us through an encrypted platform.
This PMS also does account consolidation and risk calculation. It is designed to adhere to existing regulations be it the Alternative Investment Fund Managers Directive or the liquidity risk management.
Fees for funds are also fully reflected on the system.
Q. How has the industry changed in the past five years?
It’s a more mature industry today and is well-recognised by the MAS. High-net-worth clients have also shown greater recognition of the concept of IAMs even if they are not working with one.
The Association of Independent Asset Managers was founded seven years ago with just a few firms. Today, there are 38 ordinary members. As the association grows, it benefits the industry because it can facilitate better communication with MAS and can organise more industry-related events.
We have also noticed the establishment of more Asia-based IAMs.
Q. What are new challenges that IAMs are facing today?
Regulations are driving up operating costs and IAMs should anticipate changes to better prepare themselves. IAMs looking to establish a presence here should be proper shops from day one and not just a small outfit with two or three staff to test waters.
Q. Do you foresee big tech players being a potential competitor in wealth management?
No, private wealth management is a niche market. Big tech works better for retail investors. It could be a competitor in the sense that people talk about it. Clients working with us could also have a robo-adviser on the side and will compare their portfolios against ours. However, it’s only a small sum that they’re investing online.
Q. Do you think the industry is too saturated at this point?
Yes and no. Yes because there are many firms in the private wealth space, which has led to consolidation in the private banking industry. No, because the creation of wealth is a never ending story.
Q. What are some new regulations you’re watching?
We are keeping a close watch on the liquidity risk management framework for fund management and the new Variable Capital Company framework, which may replace the traditional fund industry for Singapore based asset managers. We also remain vigilant on Know-Your-Customer/AML checks and processes.