Wealth managers ramp up staff in Hong Kong to chase Chinese demand

Noah Holdings

24/03/2023 05:45

By Summer Zhen
       HONG KONG, March 24 (Reuters) - Wealth management firms
are expanding operations aggressively in Hong Kong to meet
pent-up demand from rich Chinese individuals looking to invest
more money overseas after three years of COVID-19 curbs,
industry sources said.
    High- and ultra-high net worth families in China are seeking
to diversify their investments as they are finally able to
travel and as they chase alternatives to a depressed property
market at home.
    This week has been exceptionally busy, sources said, with
mainland visitors flocking to the first Art Basel fair in Hong
Kong since China's COVID-19 curbs were lifted.
    "Reopening means robust growth in our international
business. Client inquiries for offshore investment increased
155% in the first quarter year on year," Oscar Liu, CEO of the
wealth management department at Noah International told Reuters.
    Noah Holdings  6686.HK  NOAH.N , the largest independent
wealth management firm in China, was among five private banks
and wealth management firms Reuters talked to that said they
held client events in the city and organised private art tours. 
    They are chasing some of China's 2.1 million "high net
wealth" families, each with net worth more than 10 million yuan
($1.46 million), and 138,000 ultra-high net worth families with
over 100 million yuan as of January 2022, according to data from
Hurun Research Institute published this month.
    Offshore investment enquiries jumped by a third in March
over the previous month, Liu said.
    Shanghai-based Noah, which manages $22 billion in assets,
plans to expand its front office in Hong Kong five-fold from
about 20 to 100 relationship managers in 2023, hiring locally
and transferring personnel from mainland China.
    The wealth manager's expansion plan is apart from other
middle and back office staffing. Liu said overseas business was
expected to make up over 30% of Noah Holding's total assets
under management in 2023, up from 20% currently.
    Hywin Holdings  HYW.O , another Chinese wealth manager,
invited 30 ultra-high-net worth clients to workshops, fund
manager visits and even a yacht party in Hong Kong last week. 
    Nick Xiao, Hywin International's CEO, said the reopening had
not only made it easier for wealthy Chinese investors to access
global products, but had also revived interest in Hong Kong as a
hub for financing, investment and a base for accessing mainland
markets.
    The firm intends to recruit up to 10 private bankers in 2023
and add staff in supporting roles, Xiao said.
    
    VYING WITH SINGAPORE
    Dong, an investment banker in Shenzhen, plans to come to
Hong Kong in the next few months to open a bank account and buy
insurance products.
    "Holding dollar assets provides a lot of flexibility. It can
be used in the future to buy overseas property or to pay tuition
for children studying abroad," said Dong, who prefers to go by
his family name.
    To tap such rapidly growing demand from mainland investors,
HSBC Bank  HSBA.L  launched a pilot program to keep three Hong
Kong branches, including wealth management centres, open seven
days a week. 
    The Hong Kong government, too, organised a Wealth for Good
summit on Friday to attract global family offices to the city
and away from Singapore, which had become the preferred
destination for wealthy entrepreneurs during Hong Kong's strict
pandemic restrictions.
    The government also issued a policy statement on Friday,
emphasising new measures including tax cuts for family offices
and establishment of art storage facilities to support "a
vibrant ecosystem for global family offices and asset owners".
    Chinese financial institutions are vying for this growing
wealth management business in Hong Kong. 
    Chinese Everbright Bank and Hua Xia Bank set up private
banking departments in Hong Kong in the past few months,
according to sources familiar with their plans. 
   ($1 = 6.8450 Chinese yuan renminbi)

 (Reporting by Summer Zhen; Editing by Vidya Ranganathan and
Sonali Paul)
 ((summer.zhen@thomsonreuters.com; 852-3462-7739;))