Hong Kong firms seek alts growth through merger

Added 8th July 2016

Carret Private Investments intends to merge its Hong Kong private wealth management business with QL Asset management in hope of expanding the asset base in alternatives.

Hong Kong firms seek alts growth through merger

Kenneth Ho, Carret Private Investments managing partner

Both firms were founded by former Julius Baer executives within the past two years and are based in Hong Kong. The merger is pending regulatory approval.

Together they hope the assets under management will reach $1bn in the next 6-12 months, said Carret Private managing partner Kenneth Ho.

Carret Private is a multi-family office with ultra high net worth clients mainly in North Asia. Its affiliates include New York-based Carret Asset Management and Quadrant Management.

It focuses on managing client investment portfolios across alternative assets, including real estate, private equity and hedge funds, by using products from its affiliates or from external managers.

QL Asset management also has an alternatives-focused wealth management business, and manages its own absolute return global macro fund (a hedge fund) as well as an equity fund.

Hedge funds, however, fell out of favor in the aftermath of the financial crisis.  

“We see a slight dip in hedge fund investing because of the negative publicity,” he said, though he added that some small- to mid-sized regional hedge funds have actually “outperformed the bigger hedge funds, and those in the US".

More AM acquisitions 

QL managing partner Young Jeong Kim said in a statement that officials hope the merger will support growth and bring “marketing synergies to expand into new markets". 

Carret is also interested in acquiring more small- to mid-sized alternatives-focused asset managers in China and Singapore, Ho told FSA.

The firm hopes to build a significant footprint in Greater China. "This market has a particularly strong interest in alternative asset classes,” Ho said. “These days [Greater China investors] are looking at individual real estate and private equity deals in the US."

Additionally, a potential client base is growing. Ho said in Asia, more small family offices are emerging after tough regulations pushed banks closer to a one-size-fits-all client strategy.

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