Awards for Distinction 2014 – China International

AFD2014_Best Private Bank - China International

Goldman Sachs

Nick Yim

Nick Yim
Head of Greater China Market
Goldman Sachs Private Wealth Management

China presents an interesting conundrum for private banks in Asia. A seemingly infinite potential for economic growth and an ability to mint millionaires by the month is juxtaposed with regulatory uncertainty – making China a market that is both appealing and daunting. However, despite economic slowdown decreasing GDP growth to 7.3% this year, the nation’s high net worth individual (HNWI) population of 758,000 saw a collective increase in wealth of 21% to US$3.8 trillion, according to latest estimates.

Goldman Sachs, the deserved winner of this year’s award for Best Private Bank – China International, has proved it is more than prepared for the challenge. Over the year, the private wealth management arm has bolstered its assets through the creation of multiple sizeable mandate accounts in China. Cementing its claim as the preferred partner for Chinese millionaires, Goldman Sachs has a clear product and advisory strategy, seamless internal processes, and a fruitful partnership.

The virtues of portfolio construction and the focus on asset allocation strategies that can stand the test of time – what was previously the antithesis of private banking in China – has suddenly became very relevant. The bank emphasises that its goal is not to build portfolios with the aim of achieving aggressive returns and accumulating wealth. Instead, it aims to focus on offering traditional private banking services in wealth preservation; targeting average, but consistent, returns. Although the concept is relatively new to the Chinese HNWI segment, it was one that was well-received as Goldman Sachs witnessed the creation of several large mandates, including for hedge fund portfolios, throughout the year.

Products aside, the American private wealth manager is well aware of how competitive the field is for the acquisition of new clients. According to Nick Yim, Head of China Market for the private wealth management arm, many mainland Chinese clients, who make frequent visits to Hong Kong, are already fully serviced in terms of their private bank needs. However, these clients still possess a tremendous amount of wealth that has no offshore home. In its strategic partnership with Gao Hua Securities, Goldman Sachs has been able to make greater inroads into China’s wealth market, treating any location within three hours of its Beijing and Shanghai offices as serviceable areas. With regards to hiring, Goldman Sachs has recognised the thin pool on offer and has committed to looking for talent from sources like the media sector – focussing on the potency of not just banking experience, but also of network.

Goldman Sachs will undoubtedly be constantly looking over its shoulder as a raft of private banks continue to seek to assume its pre-eminent footing through the capture of market share and the establishment of reputation in Asia’s most attractive wealth management jurisdiction. But for now, Goldman Sachs has convinced its Chinese clients of the benefits of long-termism and asset allocation – a truly worthy feat in a capricious market. For these reasons, Goldman Sachs emerges triumphant as this year’s winner of Asian Private Banker’s award for Best Private Bank – China International.