With a private client business in mind, the firm is moving to partner with more Asian, European and US private banks, said Helene Van Meerbeek, managing partner for external asset management. She joined in Hong Kong in July to set up the EAM desk, having previously worked at structured products platform Leonteq Securities.
Wealthy Chinese are more clued up now when it comes to diversification, with an investment scope widening to include assets in Africa, Europe and South America, she said. Their concerns are now related not only to market risk, such as share price volatility, but also to economic, political and credit risk.
The understanding that diversification of assets is necessary has led to a desire to deal more with Western banks.
“Some private banks are better at certain things than others, and that’s part of the advice you can provide clients,” she said. “We have relationships with quite a few banks and see a big difference between them.”
EAMs often use private banks purely for custody, but Munsun relies on them for various services, such as setting up trusts or help with portfolio reporting. But it would not use them for sourcing property deals, said Van Meerbeek.
Ultimately, Munsun’s aim is to offer an independent one-stop shop and advisory network in addition to its $2bn funds business. While the 40-headcount firm runs its own products – the flagship being a Greater China long/short equity strategy – the EAM team can recommend and select external managers.
However, Van Meerbeek acknowledges the company faces challenges, having covered this segment previously at Leonteq: “I’ve seen a lot of people set up EAMs and a lot go back to working for private banks after a year or two. It’s not that easy.”
Indeed, many private banks in Hong Kong are still not familiar with the EAM concept. “Often the reaction is ‘Do you want to speak to our relationship managers?’
“Once they understand that we bring business to them that they would not otherwise have had, they see added value.”