China's Uber-Rich Prompt One Firm to Build a Hong Kong Private Bank

China's Uber-Rich Prompt One Firm to Build a Hong Kong Private Bank

Bloomberg·2017-09-29 19:20

Haitong International Securities Group Ltd., a unit of China’s second-largest brokerage, plans to add about 100 jobs in Hong Kong as it seeks to draw more of the nation’s growing ranks of multi-millionaires to its wealth management business.

The firm is focused on strengthening its group of relationship managers specialized in ultra-high net worth clients with at least $10 million, said Duke Du, managing director of retail sales and equity derivatives. The new hires will take place over the next 12 months and boost the number of sales staff in private wealth management to 160, while retail brokerage staff will remain at about 120.

Chinese-backed brokerages are stepping up the expansion of wealth management operations in Hong Kong as they target increasingly-affluent mainlanders with a growing appetite for offshore investments. The firms are competing with global banks such as UBS Group AG and Credit Suisse Group AG for a slice of a Chinese market that Capgemini SA estimates has more than 1 million millionaires.

“Haitong International is upgrading into a more wealth management-focused business from a retail brokerage,” Du said in an interview. “We are targeting higher-end customers with a broader range of products in Hong Kong.”

Hong Kong’s Securities and Futures Commission had issued 1,395 asset-management licenses as of June, a 56 percent increase from the end of 2012. DeepBlue Global Investment Ltd., set up by a former chief investment officer of fixed income at Fosun Group, was granted a license in January, and CEB International Asset Management Corp., part of China Everbright Bank Co., received a license in December.

Tencent’s Move

Tencent Holdings Ltd., China’s largest social media firm, said last week it plans to enter the traditional finance industry by taking a stake in China International Capital Corp., the investment bank once dubbed the Goldman Sachs of China. The move is expected to help CICC’s push into wealth management.

Haitong International, created after its parent bought Hong Kong’s Taifook Securities Co. in 2009, serves about 200,000 clients with services from retail brokerage to investment banking. The focus on wealth management comes after the firm reported a 28 percent increase in first-half profit from a year earlier.

The firm this year is the leading manager of sales of high-yield bonds denominated in dollars, euro and yen from companies in Asia outside Japan, according to data compiled by Bloomberg. It’s also the top Chinese-backed investment bank working on Hong Kong equity and rights offerings this year, the data show.

“Our relationship managers can introduce their high-end clients to our investment banking business, while our clients doing initial public offerings or bonds can come to us for wealth management when they need to,” Du said.


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