A fortress for your wealth
Owned and managed by a small number of partners, with the same families at its helm for a remarkable eight generations, the Pictet Group has been managing wealth and investments for its clients for over two centuries.
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At December 31, 2020, it had more than CHF 609 billion in assets under management or custody, making it one of the leading independent wealth and asset managers in the world. We speak to Alex Ng, Chief Executive Officer, Hong Kong Branch, Head of North Asia Pictet Wealth Management Asia, to find out the latest emerging trends concerning Family Offices in Asia, and how Pictet is supporting the region’s wealthy families.
It was an extraordinary year amidst the Covid-19 crisis last year, how has Pictet fared?
For Pictet, 2020 has actually been a year of record achievement. The Pictet Group has demonstrated once again its resilience under stress and the power of partnership to overcome adversity. The Group reported a rise of 10 per cent in its operating income and a 7 per cent rise in net profit. Assets under management or custody rose to an all-time high thanks to both the excellent investment performance and strong inflows of net new money across all of the Group’s business units.
How does the Pictet model shape your business vision and strategies?
This resilience owes much to Pictet’s model of governance in place for over two centuries – a partnership, that is designed to build a “fortress” for our clients.
Currently Pictet is led by seven partners who are both owners and managers with an average tenure of over 21 years. This gives them the latitude to focus on thinking, planning and development for the long-term goals.
Besides our financial independence and long-term perspective, what is lending confidence to our clients is the strength of Pictet’s balance sheet. The group operates with levels of capital well above those required by both the Swiss and international capital adequacy regulations. While Pictet’s Aa2 and AA- ratings by Moody’s Investors Service and Fitch Ratings respectively are among the highest in the banking industry.
How does the Pictet model resonate with your Asian clients?
Having been present in Asia for more than 30 years, Pictet Wealth Management has established deep expertise and strong ties in its Hong Kong and Singapore hubs.
A major development across Asia and increasingly so in Greater China is the significant generational wealth transfer that is going to take place in the coming years. The younger generations are now taking up the leadership roles in many of these families. Their concerns and aspirations may be different from those of their forebearers.
For us in Pictet, our focus is to support our clients in their succession planning and legacy. The fact that Pictet has been around for 216 years, with the same families at its helm for eight generations, certainly gives us a certain pedigree when it comes to talking about securing family wealth.
How do you see the development of Family Offices in Asia and especially in the Greater Bay Area?
The growth in family offices is a natural consequence of rising family wealth in Asia. According to Wealth-X, the region is home to 758 billionaires in 2019, including 342 in China, which recorded the strongest growth globally in both billionaire population and combined wealth.
We note that many of these large Asian wealth holders are seeking a more structured way of organising the management and transition of family wealth to the next generation, fuelling the growth of family offices in the region.
What is the role of Hong Kong as a hub for global family offices going forward?
We believe the Greater Bay Area (GBA) will be the next driving force for more family offices to set up in Hong Kong as the city continues to establish itself as an IPO hub for GBA companies. With a combined population of around 70 million in 11 cities and an economy estimated at US$1.65 trillion, the GBA is becoming one of the world’s fastest-growing economic regions. In fact, the three cities of Hong Kong, Guangzhou and Shenzhen together have the highest concentration of wealthy people in the world.
Hong Kong is stepping up its efforts in capturing this opportunity and making it attractive for family offices from around the world. InvestHK as a government arm with a dedicated Family Office team, for example, provides one-stop ease for family offices that use Hong Kong as a regional base from which to manage their wealth and investment portfolio in Asia and beyond.
Hong Kong continues to enhance its competitiveness with the introduction of for instance the Limited Partnership Fund (LPF) regime last year, as a new way for investment funds to be set up through limited partnerships, which is a popular format for family offices. The recent carried interest tax concession bill will also further boost the competitiveness of Hong Kong as an international private equity fund hub.
Do you see the role of Family Offices in Asia evolving with the maturing of wealth? How does Pictet support them?
As families’ wealth grows in Asia, they are also diversifying into new areas such as direct investments and private equity, areas where Pictet Wealth Management has significant expertise, and in which family offices can play a central role.
Family offices also have a role to play in developing family governance systems, where there is still much to do in Asia. More broadly, beyond the conventional pursuit of capital growth and concierge services, family office structures can be instrumental in preserving harmony and the legacy of the family across generations.
The Pictet Group is a partnership of seven owner-managers. Its principles of succession and transmission of ownership have remained unchanged since foundation in 1805, in Geneva. It offers wealth management, asset management, and related asset services. With CHF 609 billion in assets under management or custody at December 31, 2020, and employing more than 4,900 people in 30 offices worldwide, Pictet is today one of the leading Europe-based independent wealth and asset managers. Pictet Wealth Management has had a strong presence in Asia for over 35 years, with home-grown teams servicing clients from its main hubs of Hong Kong and Singapore.
This advertisement has been issued by Pictet & Cie (Europe) S.A., Hong Kong Branch (“Pictet HK Branch”) which is incorporated in Luxembourg with limited liability. It is an authorized institution within the meaning of the Banking Ordinance and a registered institution (CE No.: AQG515) under the Securities and Futures Ordinance carrying on Type 1 (dealing in securities), Type 4 (advising on securities) and Type 9 (asset management) regulated activities. The registered address of Pictet HK Branch is 9/F., Chater House, 8 Connaught Road Central, Hong Kong. The value of an investment can go down as well as up, and investors may not get back the full amount invested. Nothing in this document shall constitute financial, investment or legal advice. The information, tools and material presented in this document are provided for reference only and are not to be used or considered as an offer, an invitation to offer or solicitation to buy, sell or subscribe for nor as advice or recommendation with respect to any investment or financial instruments. This document is intended for general circulation and it is not directed at any particular person. This document does not have regard to the specific investment objectives, financial situation and/or the particular needs of any recipient of this document. All rights reserved. Copyright 2021