Hong Kong has become the city of choice for global private equity firms and hedge funds looking to establish offices in Asia, and Singapore is becoming the regional centre for private banking and wealth management, according to findings from executive search firm CTPartners.
As the integration of Hong Kong's financial sector with China's accelerates, it has become a magnet for global financial services companies seeking experts on financial services in China. Nonetheless, Hong Kong’s growing pool of private bankers remains somewhat limited in scope, as their coverage is heavily focused on China’s market. Singapore’s broad range of investment tools and its competitive tax environment has enabled it to develop hubs for international wealth management, consumer products, healthcare and south-east Asian market specialists, according to CTPartners.
“Asia is becoming an important investment environment for the world, [and] we will see Hong Kong being more [attractive] on the equity side and Singapore being more [attractive] on the fixed income and wealth management side,” said Alex Eymieu, partner at CTPartners.
“It depends on your geographic focus. Hong Kong becomes an obvious choice if your business is going towards China and it is becoming a truly specialised financial services hub [for this].
"We see across multiple industries that if you are a global CEO and you need to set up an Asia-Pacific headquarter, across a lot of industries you have two choices – Singapore or greater China. It depends on where your business is, but a lot of people will choose to set up an Asia-Pacific headquarter in Singapore and choose between Beijing, Shanghai or Hong Kong as their greater China headquarter.”
With US and European financial services companies setting their sights on Asia, many firms are investing in setting up operational corporate infrastructures in Asia, including investment teams, operational centres, and regional risk and compliance teams. The decision earlier this year by JPMorgan’s head of global investment banking, Jeff Urwin, and UBS’s chairman, Alex Wilmot-Sitwell, to relocate to Hong Kong further highlights a growing trend among firms of relocating global heads and fund managers from financial centres in the West to cities in the East.
“We are witnessing institution asset management companies having some of their portfolio managers not only in Europe or the US but also in Asia, which is quite new because in the past you only had local portfolio managers with local products,” said Mr Eymieu.
Paul Aldrich, managing partner of CTPartners, said: “In terms of the impact of the move by global heads to Asia, there is a symbolic nature to that as it shows a commitment to the region. The other impact is if a global head is located in a particular region, they are bound to absorb the nuances and issues of doing business [there] than what they can pick up sitting in an office in another part of the world. [This] is only really starting to happen and time will tell what the impact will be on business itself.”
“Asia is becoming important [and] the fund managers need to allocate more percentage of their funds towards Asia in order to get more growth in their funds, and they need to be close to clients,” said Mr Eymieu. “So instead of flying in and out of Asia, we are seeing a number of them deciding to be [based] in the region.”