Bloomberg Wealth Asia Summit
May 9, 2023
After four years, we were back in Hong Kong to explore how private wealth works as the world economy looks increasingly unstable. We looked at digital assets, fine art, Web3, a booming India, investing in mental health and more. From purpose-driven companies to a growing culture of entrepreneurship, particularly in Asia, a new band of high-net-worth individuals is emerging. We gathered the region’s leading investors, economists and money managers to hear their actionable intelligence on navigating the volatility and finding strategies for building wealth.
- Adrian Cheng, CEO, New World Development Company Limited & Founder, The WEMP Foundation
- Nicolas Chow, Chairman of Asia, Worldwide Head & Chairman of Chinese Works of Art, Sotheby’s
- Nicole Denholder, Founder, Next Chapter Raise & Co-Founder, Sophia
- Calvin Lee Kwan, Director of Sustainability and Risk Governance, Link Asset Management Limited
- Chi-man Kwan, Group CEO & Co-Founder, Raffles Family Office
- Charles Li, Founder & Chairman, Micro Connect
- Cici Lu, Founder & CEO, Venn Link
- Rahul Malhotra, Head Private Banking Global India & Developed Markets, Julius Baer
- Nuno Matos, CEO, Wealth & Personal Banking, HSBC
- Rakesh Patel, Founder & CEO, Alta Capital Real Estate
- Ruth Shapiro, Co-Founder & CEO, Centre for Asian Philanthropy and Society
- Annabel Spring, CEO Global Private Banking and Wealth, HSBC
- Desiree Wang, China Country Head & Chairman of China Management Committee, J.P. Morgan Asset Management
- Lena Wong, Founder, HK Momtrepreneurs and Founder, Womentors
- Edith Yeung, General Partner, Race Capital
- Eddie Yue, Chief Executive, Hong Kong Monetary Authority
- Steffanie Yuen, Managing Director & Head of Hong Kong, Endowus
- Xiaofeng Zhong, Chairman of Greater China & Member of the Group Executive Committee, Amundi
- Lulu Chen, Asia Investing & Real Estate Team Leader, Bloomberg
- Krystal Chia, China Reporter, Bloomberg
- Mark Cudmore, Global Head of Macro Analysis & Co-Anchor, European Markets Open, Bloomberg
- Vandna Dawar Ramchandani, APAC Head of Corporate Philanthropy, Bloomberg
- K. Oanh Ha, Senior Global Business Reporter, Bloomberg
- David Ingles, Chief Markets Editor & Anchor, Bloomberg TV & Radio
- Fion Li, Team Leader, Deals, Bloomberg
- Madeleine Lim, Senior Executive Editor, APAC, Bloomberg
- John Liu, Senior Executive Editor Greater China, Bloomberg
- Jeanette Rodrigues, Managing Editor for South Asia, Bloomberg
- Brad Stone, Senior Executive Editor Global Tech, Bloomberg
- Denise Wee, China Finance Reporter, Bloomberg
Sponsor Spotlight: In Conversation with Nuno Matos
“Wealth is a direct correlation of sustainable economic growth. It’s a structural story and the most compelling opportunity in the consumer segment today,” said Nuno Matos, CEO, Wealth & Personal Banking, HSBC. Trending is Asia’s wealth, growing twice as fast as the rest of the world. It will continue for the next 10 years. “The expansion of the middle class with a new generation of entrepreneurs; that story will continue to outpace the rest of the world. Asia wealth, excluding Japan, is going to be bigger than the entire West and Europe in the next two years.”
What has changed are risk levels “For many years, we had extreme monetary policy, with basically no volatility. Investors became complacent. That’s over. Which means from now on, going back to the old principles of diversification is absolutely critical.” High rates mean fixed income is back. “Even term deposits in banks are sexy again, which is curious.”
In Conversation with Eddie Yue
When it comes to exposure of banks to virtual assets, two aspects are straightforward; exposure on their books, for which there are clear guidelines, and crypto, with a risk rate of about 150%, according to Eddie Yue, Chief Executive, Hong Kong Monetary Authority. “But for banks to provide services to clients relating to virtual assets, we have already put out several guidance notes, and we will put out more.” They will include how to assure they really know the client and the necessary guardrails for custodial service. “
Speaking about the SVB collapse, Yue said it is not relevant. The failure came from the concentration of uninsured depositors, maturity mismatch and lack of stress testing. “All these will not happen in Hong Kong because we basically treat all banks in the same, straight regulatory way.”
Sharing the Wealth
Ruth Shapiro, Co-Founder & CEO, Centre for Asian Philanthropy and Society offered insight as to why Asia, currently holding 42% of the world’s wealth, is low on the philanthropy scale. With the exception of a few countries, “Asia is still primarily emerging markets, which means they have different challenges than you would in Europe or the United States.” From SMEs to large corporations, 85% of commerce is family-dominated, with the majority of donated money routed through them, creating a merging of personal philanthropy, CSR, local knowledge, R&D and business development. “We actually think that’s a pretty sustainable model.”
Some Asian countries are aiming to be a philanthropic hub. Annabel Spring, CEO Global Private Banking and Wealth, HSBC talked about the beneficial roles regulations and policies can play, and said there is a lot families can do as well. “Asian families are intensely private, and this giving is intensely private. It’s often local and done privately through their businesses or families.” But the ability to share what they’re doing, share best practices, share learning, sometimes sharing investments to double or triple the impact really can amplify philanthropy. To that end, HSBC has taken on a matchmaking role
Wealth Making Impact
Most vulnerable to the mental health impacts of abuse and the pandemic are the youngest generation. Adrian Cheng, CEO, New World Development Company Limited & Founder, The WEMP Foundation said the World Health Organization estimates 40% of Hong Kong’s children exhibit symptoms, including anxiety and insomnia. A major focus is on positive parenting programs that include in-school workshops designed by clinicians, beginning as early as kindergarten.
Scaling the project is an objective. “We would love to collaborate with the governments, and also other family or charitable foundations around Asia. WEMP is not just for Hong Kong. Creating an alliance in Asia is something I’m looking forward to.”
In Conversation With Desiree Wang
Desiree Wang, China Country Head & Chairman of China Management Committee, J.P. Morgan Asset Management spoke about what diversity and female representation looks like at the company. Half of its 290,000 global employees are women, and said their longevity indicates a supportive culture. Among programs that include mentoring and family networking, she highlighted a re-entry program funded by Asset and Wealth Management CEO Mary Erdoes. “It targets people who take a break from work and when they want to rejoin our workforce, we lend our support to them.” In its 10 years, the program has assisted over 400 people in returning to full-time employment with J. P. Morgan.
Opportunities in China
Xiaofeng Zhong, Chairman of Greater China & Member of the Group Executive Committee, Amundi spoke about China’s restructuring of the asset management sector prior to the pandemic, issuing regulations in April 2018. In mid-2019, the Financial Stability and Development Commission issued 11 measures in favor of the deepening of the “Open Up” policy that relaxed foreign investment restrictions. “If you look at the past five years, including three years under the shed of covid, China has basically witnessed a deep and broad restructuring phase.”
On U.S.-China relations, geopolitical tensions have prompted a focus inward, on domestic circulation. “China will beef up and strengthen the resilience of the market amid a changing geopolitical market. This is why it’s key for global asset managers to get into this market with a set up that has strong technicity and autonomy.”
Navigating Common Prosperity
“It is quite clear that with investors today, fear is absolutely in control, rather than greed,” said Charles Li, Founder & Chairman, Micro Connect, calling this a rare moment in history that defies precedent that can be used for analysis. His company is creating a new asset class and is operating a new exchange in Macau. “We are taking advantage of the digital revolution of China at the very base level of revenue streams, little shops.” Companies that control large numbers of stores from which they can digitally extract daily receipts can go to a third market to find investors. “That asset class is essentially revenue-based financing, daily, automatically, digitally collected returns.” Li compared it to an IPO, where, “You’re selling your entire future away in multiples. Multiples are the essential sin of our current market.”
India’s Wealth Boom
From the perspective of the largest, foreign private banker in the country with the second largest working population, Rahul Malhotra, Head Private Banking Global India & Developed Markets, Julius Baer, described its economic growth as “rapid.” Its $3T GDP grew in increments of 62, eight and five years, and with the median age at 29, there is great potential for wealth creation. “I used to joke that India is the gift that never gives. It is giving now.”
The wealth exists, but is not yet being managed. The firm is focused on a major expansion that goes beyond the cities. He is seeing Indians traveling around the country, consuming, and investing. Trends need to be viewed from a global perspective, meeting both local needs and capturing the many Indians who live elsewhere but want to invest back home. Malhotra also spoke about regulatory frameworks, and the red flags around investing.
Women and Wealth
Referencing a recent J.P. Morgan report, Nicole Denholder, Founder, Next Chapter Raise & Co-Founder, Sophia noted that nearly 15,000 companies in 12 markets across APAC are identified as high-growth, but less than 6% are woman-powered. “So, what we’re seeing is that there is a real link between the fact that we need more funding going to women. We can then be seeing more women in the high-powered funding cycle.”
Lena Wong, Founder, HK Momtrepreneurs and Founder, Womentors, where the focus is on the next generation of women leaders, said it’s unusual for Chinese women to talk about money, even those studying or working in finance, and younger women. “The solution is to have the right female role model, so there is that trust level, and they feel like they can talk about things that they may not be really knowledgeable about at this stage.” She spoke further about an ESG challenge for female university students.
Wealth and Web3
Edith Yeung, General Partner, Race Capital described Web3 as “decentralized data,” and considered how it might be losing favor to AI. “The mood in Silicon Valley in the U.S. is a little bit dire. There’s definitely a big cloud over the industry because of a not-a-little-bit undefined legal framework.” Support is greater in China, and big platforms are not giving up, and still pushing the envelope, such as PayPal’s integration with MetaMask. Yeung talked about lessons learned from her firm being an early investor in FTX. Her main advice; “Definitely don’t put greed in front of control. It’s really about separating church and state.”
When investing in digital assets, particularly crypto, “It’s really important to have diversification and active management,” said Cici Lu, Founder & CEO, Venn Link. Before the market collapsed, the top ten assets were the focus, but that may not be the case going forward. “You can’t really define crypto assets based on market cap, because it’s so volatile.” On the marriage between blockchain and AI, blockchain needs to connect to the real market data. “There’s a big struggle for the ESG green bonds, but it’s really expensive for the issuer, for the syndicator and SM managers to own a green issuance.” AI has the potential to do that more accurately and efficiently.
Sustainable Investing: Health and Wellness
“The demand and expectation of health and wellness in the commercial real estate sector has skyrocketed,” Calvin Lee Kwan, Director of Sustainability and Risk Governance, Link Asset Management Limited. Added to that is a post-covid need and desire for social wellbeing; “social inclusion, collaboration, and connectivity.” What social wellness looks like in a building comes from various design perspectives, like more of the natural lighting that is linked to increased productivity, fresher air, and spaces that promote social community, by literally thinking outside the box of a square structure.
Keeping investments sustainable means looking for returns for doing the right thing, said Rakesh Patel, Founder & CEO, Alta Capital Real Estate. Last year, they invested in a wellness retreat center in Thailand, “and already, what’s interesting is the wellness packages we sold at the retreat in 2022 were already 28% above 2019. That’s not just a cyclical rebound of people searching for wellness, that’s a structural growth trend, as well.” Also interesting is that the guest makeup is about 80% caucasians, from Europe and Australia, 80% female and 80% under age 50.
Wooing NextGen Wealth
Ultra-high-net-worth individuals in China are holding $160T, or about 1.6 times the GDP, said Chi-man Kwan, Group CEO & Co-Founder, Raffles Family Office. Whatever percentage is transferred to the younger generations over the next 30 years will be massive. “If you’re going to be part of this industry, you better understand what the next generation will be thinking, and what their preferences are going to be.” Investors are looking for more depth, in terms of making a difference, such as turning a home or building from brown to green. “Ultimately, the new generation wants to have a positive impact on the society as a whole.“
The last 25 years has seen a gender shift in wealth. “It’s a very powerful force,” said Steffanie Yuen, Managing Director & Head of Hong Kong, Endowus. “We definitely see on our platform a very balanced gender split. Females are taking more of a critical role in family wealth planning.” More educated than before, they are looking for transparency, which is where technology plays a big role, providing access to information. There is also a generation of female entrepreneurs generating a lot of wealth. “This is a booming area. There is a big demand for advice in what was historically not a big focus area.”
In Conversation With Nicolas Chow
From contemporary to old masters, 36% of fine art sold globally is snapped up by Asian buyers, including a Botticelli that recently went to a mainland China bidder for $92 million, according to Nicolas Chow, Chairman of Asia, Worldwide Head & Chairman of Chinese Works of Art, Sotheby’s. Despite the major economic downturn during the pandemic, those were record years for Sotheby’s in Asia, with a return of Chinese art peaking as it celebrates its fifth year there. “We’ve done quite a lot in Vietnam, as well. In the last four or five years, Vietnamese buyers have been an incredible new power on the scene.”
Chow related the story of the sale of the authentic “chicken cup,” a 15th century Ming dynasty piece that has been replicated tens of thousands of times. Immediately after the buyer swiped his AmEx card to settle his $38 million bid, he drank tea from it, sparking social media outrage.
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