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Business Times
2 days ago
- Business
- Business Times
Shifting appetite among Asia's rich could lift investments in alternative assets
[SINGAPORE] More of Asia's richest are viewing private-market investments as a core part of their portfolios, say senior private bankers. With allocations ranging from the single digits up to 15 per cent of their portfolios to the asset class, this could translate to as much as US$1.5 million per investor. If this trend continues, the total assets under management (AUM) in private markets by individuals, each with a net worth of US$10 million, could hit US$1.39 trillion in Asia by 2028, going by a back-of-the-envelope estimate by The Business Times. The sum was derived from Knight Frank's 2025 Wealth Report, which forecasts the number of these wealthy Asia-based individuals to grow to 928,722 in 2028. The report noted that this group stood at 854,465 in 2024, meaning that as much as US$1.28 trillion could be invested in alternative assets . Alternative assets, which comprise private-market investments in equity, credit, real estate and infrastructure, have traditionally been the domain of institutional investors such as pension funds, but rich retail investors are now wanting a piece of the action. As such assets are less liquid and transparent than publicly traded assets such as stocks and bonds, countries generally impose guard rails to restrict the access that retail investors have to these private assets. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up In Singapore, investors who are not private-banking clients – but whose investable assets range from S$5 million at DBS and UOB to US$10 million at Standard Chartered – would generally need to be accredited investors to invest in such instruments. Nicholas Cheng, head of private markets group at Standard Chartered Global Private Bank, told BT that there is a clear trend of private-banking clients in Asia allocating more to alternative assets over the past five years. 'Previously, private-market investments might have been seen as opportunistic, 'nice-to-have' additions. Now, they are increasingly viewed as core, strategic components of a well-diversified portfolio. Clients are actively building long-term allocations, understanding the role these assets play in their overall wealth strategy.' In general, StanChart's private-banking clients allocate 15 per cent of their portfolios to such assets. Diversifying away from public markets Such investors find alternative assets appealing because these instruments allow them to diversify away from equities, which can be volatile in times of uncertainty. In addition, Asia's rich want to increase their exposure to private companies, which may want to stay that way. Chee Jiun Wen, head of alternative investments at Bank of Singapore, said: 'As companies stay private for longer, investors seek alpha generation, and as the emphasis on portfolio diversification grows, we believe opportunities and access to alternative investments should only continue to expand for our clients.' Hamilton Lane, one of the world's biggest private-market investment firms with more than US$958 billion in AUM and supervision, said that 87 per cent of US companies with revenues exceeding US$100 million were private as at early-2022 – and this was just the year following 2021, a record year for initial public offerings, when companies raised US$316.6 billion on US bourses. Private-banking clients are also comfortable with the illiquidity premium that alternative assets offer. This is the premium that these investments offer to investors, to entice them away from publicly traded, more-liquid instruments. Mathieu Forcioli, global and Asia-Pacific regional head of alternatives, wealth and premier solutions at HSBC, said: 'Private-market investing introduces an element of illiquidity in an investment portfolio. Over the past years, our clients have been assessing the amount of illiquidity risk they can take, and have been able to invest outside publicly traded instruments, with the aim of improving the risk/return profile of their portfolio.' HSBC recommends an 11 per cent allocation to alternative assets for those with medium-risk portfolios. As Asia's rich become more familiar and comfortable with investing in alternative assets, they are likely to continue raising their exposure, market observers said. Investing more in alternative assets The private banks that BT approached say their clients' AUM in alternative assets has grown strongly in the past few years. Declining to go into specifics, UOB reported that the figure jumped more than five times between January 2023 and May 2025. At Bank of Singapore, the inflows to alternative investments surged more than 80 per cent in 2024 from the year prior. The Monetary Authority of Singapore's latest annual survey of the local asset-management industry showed the total AUM in alternatives hit nearly S$1.39 trillion in 2024, up 14 per cent from 2023. In private equity and venture capital, the biggest component, AUM rose 20 per cent to S$789 billion. With increasing sophistication in alternative assets, UOB Private Bank's clients are diversifying within private markets. Wong Meng Keet, head of managed products and alternative investments at UOB Private Bank, said: 'Previously, clients interested in alternatives would typically have a combination of investments in hedge funds and private equity. Today, they are spreading their investments across a wider range of options, and it is not unusual for clients to have a combination of private equity, private credit, private real estate and private infrastructure.' Banks are launching more products to cater to the expanding appetite, including the so-called semi-liquid funds that offer periodic redemption opportunities. As open-ended funds that provide ongoing access, investors can stay invested for as long as they choose. They are more palatable to retail investors, compared to the closed-ended funds that cater largely to institutional investors with deeper pockets and longer investment horizons. US$50 million ticket size On the higher end of the wealth spectrum, DBS Private Bank and Hamilton Lane launched a product in June catering to the bank's ultra-high-net-worth (UHNW) clients and family offices. With a minimum ticket size of US$50 million, each of these clients can set up a portfolio of private-asset investments tailored by Hamilton Lane, in its first such partnership with DBS. The product has 'garnered strong interest' among DBS' clients since its launch. The bank signed a mandate with a family office where the chief investment officer hails from a commodities trading background and is 'relatively unfamiliar' with investing in private assets, DBS told BT. Kerrine Koh, head of South-east Asia at Hamilton Lane, said the partnership sprung from the firm's observation that UHNW investors often have 'unique objectives, risk tolerance and risk preferences', and that off-the-shelf products may not meet these needs. On the opposite end of the spectrum, accredited investors who are not private-banking clients can access alternative assets at StanChart and OCBC. These are individuals with net personal assets of more than S$2 million, or with an annual income of S$300,000. Priority banking clients at Stanchart with at least S$200,000 in deposits and who are accredited investors in Singapore can make investments in private-market funds. These include a European private-credit fund that the bank launched in February. Accredited investors at OCBC have three private-market funds to choose from. The bank started offering the Blackstone Private Credit Fund in 2022, and added the Apollo Aligned Alternatives Fund this year. This month, the bank added a private-credit fund with a Singapore-dollar share class for the first time, to cater to those who prefer to invest in the local currency, he added. Strong interest in these products 'propelled our private-market funds' AUM 2.5 times in one year', said Timothy Liew, head of investments at OCBC.
Business Times
08-05-2025
- Business
- Business Times
Asian banks see big boost to wealth business as currencies rally
[HONG KONG, SINGAPORE] A sharp rally in Asian currencies is set to boost demand for wealth and forex products as clients seek alternatives to US dollar-denominated assets and demand for hedging grows amid trade tariff uncertainties, bankers and analysts say. The rally in the currencies since last week, starting with the Taiwan US dollar and spreading outwards to those of China, Hong Kong, Malaysia, Singapore and South Korea, sounds a warning for the greenback, and is seen as an 'Asian crisis in reverse'. 'Most of our clients are Asian, so if their own currency is growing, that gives them more purchasing power for wealth management products,' Tan Su Shan, chief executive of Singapore's biggest bank DBS Group, said on Thursday (May 8). A strong Singapore US dollar would help bring a 'pool of wealth' into the leading global wealth management hub said Leong Yung Chee, the chief financial officer of United Overseas Bank (UOB). Singapore's currency has risen more than 4 per cent since US President Donald Trump hiked tariffs on Apr 2. 'We hope to benefit from that in terms of the wealth management of some businesses that we do for retail clients,' Leong said, during the bank's earnings briefing on Wednesday. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The expectations underscore how President Donald Trump's trade policies are pushing investors out of US assets and moving their money into Asia, amid growing questions about the status of the greenback as a safe haven. A weaker US dollar is expected to cloud demand for popular US fixed-income assets among wealth management clients in Asia, who may now be more open to investing in local currency denominated assets, analysts said. The return of assets to Asia will further bolster the allure of the region as a leading global wealth hub. Between 2025 and 2028, Asia is set to account for nearly half of all new high-net-worth individuals, or those with more than US$10 million in assets, according to Knight Frank's 2025 Wealth Report issued in March. The Asian currency swings have not yet hugely influenced investor sentiment, said Morningstar senior analyst Michael Makdad. However, over the long term, currency trends could affect flows as investments are allocated out of US assets. In Taiwan, a substantial portion of household financial assets has traditionally been allocated to life insurance products that invest heavily in US dollar assets, and a leap of 8 per cent in its currency within two days sent tremor across the sector. 'If Taiwanese life insurers struggle to generate attractive returns from US fixed-income investments, it may open the door for banks to offer more alternative wealth management solutions instead,' Makdad said. 'Tailwind and headwinds' Chinese exporters have accumulated a substantial amount of money in US-US dollar-denominated assets, previously on the expectation of the yuan getting weaker, said Christopher Beddor, deputy China research director of Gavekal Dragonomics. If currency expectations shift and the interest-rate gap narrows, there could be 'a quite meaningful amount of money suddenly flowing into yuan-denominated Chinese bank accounts', he said. 'We're not there yet, but it's in the back of the mind for many investors.' The heightened volatility in currency markets is also expected to drive demand for regional banks' forex services, bankers said, though local clients' exports made less competitive by stronger currencies is a concern. 'They will provide both tailwind and headwinds,' said DBS's Tan. 'A stronger currency does affect their ability to export. It will affect their cost curves as well, and so the impact will depend on whether you're a net exporter or importer.' In Japan, banks may benefit from corporate clients looking beyond usual hedging tools to reduce foreign exchange risks. Japanese firms have generally gone for the simplest hedging strategy – selling US dollars and buying yen – but the urgency of the tariff situation is prompting them to consider other derivatives, said Noriaki Masuda, deputy manager in the transaction banking department of Mitsubishi UFJ Bank. Company profitability will be affected when exchange rates fluctuate sharply, Masuda said, adding, 'There may be cases where companies will be forced to restructure business distribution or raise prices.' REUTERS
Mint
08-05-2025
- Business
- Mint
Asian banks see big boost to wealth business as currencies rally
Asian currency rally boosts demand for wealth, forex products Trump's tariffs push investors from U.S. assets to Asia Currency volatility drives demand for Asia banks' forex services By Selena Li, Yantoultra Ngui and Anton Bridge HONG KONG/SINGAPORE, May 8 (Reuters) - A sharp rally in Asian currencies is set to boost demand for wealth and forex products as clients seek alternatives to U.S. dollar-denominated assets and demand for hedging grows amid trade tariff uncertainties, bankers and analysts say. The rally in the currencies since last week, starting with the Taiwan dollar and spreading outwards to those of China, Hong Kong, Malaysia, Singapore and South Korea, sounds a warning for the greenback, and is seen as an "Asian crisis in reverse". "Most of our clients are Asian, so if their own currency is growing, that gives them more purchasing power for wealth management products," Tan Su Shan, chief executive of Singapore's biggest bank DBS Group, said on Thursday. A strong Singapore dollar would help bring a "pool of wealth" into the leading global wealth management hub said Leong Yung Chee, the chief financial officer of its United Overseas Bank or UOB. Singapore's currency has risen more than 4% since U.S. President Donald Trump hiked tariffs on April 2. "We hope to benefit from that in terms of the wealth management of some businesses that we do for retail clients," Leong said, during the bank's earnings briefing on Wednesday. The expectations underscore how President Donald Trump's trade policies are pushing investors out of U.S. assets and moving their money into Asia, amid growing questions about the status of the greenback as a safe haven. A weaker dollar is expected to cloud demand for popular U.S. fixed-income assets among wealth management clients in Asia, who may now be more open to investing in local currency denominated assets, analysts said. The return of assets to Asia will further bolster the allure of the region as a leading global wealth hub. Between 2025 and 2028, Asia is set to account for nearly half of all new high-net-worth individuals, or those with more than $10 million in assets, according to Knight Frank's 2025 Wealth Report issued in March. The Asian currency swings have not yet hugely influenced investor sentiment, said Morningstar senior analyst Michael Makdad. However, over the long term, currency trends could affect flows as investments are allocated out of U.S. assets. In Taiwan, a substantial portion of household financial assets has traditionally been allocated to life insurance products that invest heavily in dollar assets, and a leap of 8% in its currency within two days sent tremor across the sector. "If Taiwanese life insurers struggle to generate attractive returns from U.S. fixed-income investments, it may open the door for banks to offer more alternative wealth management solutions instead," Makdad said. Chinese exporters have accumulated a substantial amount of money in US-dollar-denominated assets, previously on the expectation of the yuan getting weaker, said Christopher Beddor, deputy China research director of Gavekal Dragonomics. If currency expectations shift and the interest-rate gap narrows, there could be "a quite meaningful amount of money suddenly flowing into yuan-denominated Chinese bank accounts", he said. "We're not there yet, but it's in the back of the mind for many investors." The heightened volatility in currency markets is also expected to drive demand for regional banks' forex services, bankers said, though local clients' exports made less competitive by stronger currencies is a concern. "They will provide both tailwind and headwinds," said DBS's Tan. "A stronger currency does affect their ability to export. It will affect their cost curves as well, and so the impact will depend on whether you're a net exporter or importer." In Japan, banks may benefit from corporate clients looking beyond usual hedging tools to reduce foreign exchange risks. Japanese firms have generally gone for the simplest hedging strategy - selling dollars and buying yen - but the urgency of the tariff situation is prompting them to consider other derivatives, said Noriaki Masuda, deputy manager in the transaction banking department of Mitsubishi UFJ Bank. Company profitability will be affected when exchange rates fluctuate sharply, Masuda said, adding, "There may be cases where companies will be forced to restructure business distribution or raise prices." (Reporting by Selena Li in Hong Kong, Yantoultra Ngui in Singapore, Anton Bridge and Miho Uranaka in Tokyo, Ziyi Tang in Beijing; Editing by Sumeet Chatterjee and Clarence Fernandez)
Reuters
08-05-2025
- Business
- Reuters
Asian banks see big boost to wealth business as currencies rally
HONG KONG/SINGAPORE, May 8 (Reuters) - A sharp rally in Asian currencies is set to boost demand for wealth and forex products as clients seek alternatives to U.S. dollar-denominated assets and demand for hedging grows amid trade tariff uncertainties, bankers and analysts say. The rally in the currencies since last week, starting with the Taiwan dollar and spreading outwards to those of China, Hong Kong, Malaysia, Singapore and South Korea, sounds a warning for the greenback, and is seen as an "Asian crisis in reverse". "Most of our clients are Asian, so if their own currency is growing, that gives them more purchasing power for wealth management products," Tan Su Shan, chief executive of Singapore's biggest bank DBS Group ( opens new tab, said on Thursday. A strong Singapore dollar would help bring a "pool of wealth" into the leading global wealth management hub said Leong Yung Chee, the chief financial officer of its United Overseas Bank or UOB ( opens new tab. Singapore's currency has risen more than 4% since U.S. President Donald Trump hiked tariffs on April 2. "We hope to benefit from that in terms of the wealth management of some businesses that we do for retail clients," Leong said, during the bank's earnings briefing on Wednesday. The expectations underscore how President Donald Trump's trade policies are pushing investors out of U.S. assets and moving their money into Asia, amid growing questions about the status of the greenback as a safe haven. A weaker dollar is expected to cloud demand for popular U.S. fixed-income assets among wealth management clients in Asia, who may now be more open to investing in local currency denominated assets, analysts said. The return of assets to Asia will further bolster the allure of the region as a leading global wealth hub. Between 2025 and 2028, Asia is set to account for nearly half of all new high-net-worth individuals, or those with more than $10 million in assets, according to Knight Frank's 2025 Wealth Report issued in March. The Asian currency swings have not yet hugely influenced investor sentiment, said Morningstar senior analyst Michael Makdad. However, over the long term, currency trends could affect flows as investments are allocated out of U.S. assets. In Taiwan, a substantial portion of household financial assets has traditionally been allocated to life insurance products that invest heavily in dollar assets, and a leap of 8% in its currency within two days sent tremor across the sector. "If Taiwanese life insurers struggle to generate attractive returns from U.S. fixed-income investments, it may open the door for banks to offer more alternative wealth management solutions instead," Makdad said. Chinese exporters have accumulated a substantial amount of money in US-dollar-denominated assets, previously on the expectation of the yuan getting weaker, said Christopher Beddor, deputy China research director of Gavekal Dragonomics. If currency expectations shift and the interest-rate gap narrows, there could be "a quite meaningful amount of money suddenly flowing into yuan-denominated Chinese bank accounts", he said. "We're not there yet, but it's in the back of the mind for many investors." The heightened volatility in currency markets is also expected to drive demand for regional banks' forex services, bankers said, though local clients' exports made less competitive by stronger currencies is a concern. "They will provide both tailwind and headwinds," said DBS's Tan. "A stronger currency does affect their ability to export. It will affect their cost curves as well, and so the impact will depend on whether you're a net exporter or importer." In Japan, banks may benefit from corporate clients looking beyond usual hedging tools to reduce foreign exchange risks. Japanese firms have generally gone for the simplest hedging strategy - selling dollars and buying yen - but the urgency of the tariff situation is prompting them to consider other derivatives, said Noriaki Masuda, deputy manager in the transaction banking department of Mitsubishi UFJ Bank. Company profitability will be affected when exchange rates fluctuate sharply, Masuda said, adding, "There may be cases where companies will be forced to restructure business distribution or raise prices."
Yahoo
08-05-2025
- Business
- Yahoo
Asian banks see big boost to wealth business as currencies rally
By Selena Li, Yantoultra Ngui and Anton Bridge HONG KONG/SINGAPORE (Reuters) -A sharp rally in Asian currencies is set to boost demand for wealth and forex products as clients seek alternatives to U.S. dollar-denominated assets and demand for hedging grows amid trade tariff uncertainties, bankers and analysts say. The rally in the currencies since last week, starting with the Taiwan dollar and spreading outwards to those of China, Hong Kong, Malaysia, Singapore and South Korea, sounds a warning for the greenback, and is seen as an "Asian crisis in reverse". "Most of our clients are Asian, so if their own currency is growing, that gives them more purchasing power for wealth management products," Tan Su Shan, chief executive of Singapore's biggest bank DBS Group, said on Thursday. A strong Singapore dollar would help bring a "pool of wealth" into the leading global wealth management hub said Leong Yung Chee, the chief financial officer of its United Overseas Bank or UOB. Singapore's currency has risen more than 4% since U.S. President Donald Trump hiked tariffs on April 2. "We hope to benefit from that in terms of the wealth management of some businesses that we do for retail clients," Leong said, during the bank's earnings briefing on Wednesday. The expectations underscore how President Donald Trump's trade policies are pushing investors out of U.S. assets and moving their money into Asia, amid growing questions about the status of the greenback as a safe haven. A weaker dollar is expected to cloud demand for popular U.S. fixed-income assets among wealth management clients in Asia, who may now be more open to investing in local currency denominated assets, analysts said. The return of assets to Asia will further bolster the allure of the region as a leading global wealth hub. Between 2025 and 2028, Asia is set to account for nearly half of all new high-net-worth individuals, or those with more than $10 million in assets, according to Knight Frank's 2025 Wealth Report issued in March. The Asian currency swings have not yet hugely influenced investor sentiment, said Morningstar senior analyst Michael Makdad. However, over the long term, currency trends could affect flows as investments are allocated out of U.S. assets. In Taiwan, a substantial portion of household financial assets has traditionally been allocated to life insurance products that invest heavily in dollar assets, and a leap of 8% in its currency within two days sent tremor across the sector. "If Taiwanese life insurers struggle to generate attractive returns from U.S. fixed-income investments, it may open the door for banks to offer more alternative wealth management solutions instead," Makdad said. 'TAILWIND AND HEADWINDS' Chinese exporters have accumulated a substantial amount of money in US-dollar-denominated assets, previously on the expectation of the yuan getting weaker, said Christopher Beddor, deputy China research director of Gavekal Dragonomics. If currency expectations shift and the interest-rate gap narrows, there could be "a quite meaningful amount of money suddenly flowing into yuan-denominated Chinese bank accounts", he said. "We're not there yet, but it's in the back of the mind for many investors." The heightened volatility in currency markets is also expected to drive demand for regional banks' forex services, bankers said, though local clients' exports made less competitive by stronger currencies is a concern. "They will provide both tailwind and headwinds," said DBS's Tan. "A stronger currency does affect their ability to export. It will affect their cost curves as well, and so the impact will depend on whether you're a net exporter or importer." In Japan, banks may benefit from corporate clients looking beyond usual hedging tools to reduce foreign exchange risks. Japanese firms have generally gone for the simplest hedging strategy - selling dollars and buying yen - but the urgency of the tariff situation is prompting them to consider other derivatives, said Noriaki Masuda, deputy manager in the transaction banking department of Mitsubishi UFJ Bank. Company profitability will be affected when exchange rates fluctuate sharply, Masuda said, adding, "There may be cases where companies will be forced to restructure business distribution or raise prices." Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
