Citi Private Bank (Citi PB) has used its holistic “one Citi” platform to grow its Asian client base in the vibrant family office segment by about 40% over the last two years.
“This year is a big wake-up call. Everyone is thinking about how to systematically diversify their portfolios and just as importantly, how to transfer their wealth to the next-gen. Clients are asking themselves what legacy they want to leave,” Bernard Wai, the head of Citi Private Bank’s Family Office Group (FOG) Asia told Asian Private Banker.
Holistic Family Office advisory
In Wai’s view, the family office advisory platform under FOG is one key differentiators of Citi, and the whole platform is fully funtionalised when Faye Ong rejoined Citi PB as its head one and half years ago.
Advisory within FOG covers multiple areas, from ESG to philanthropy, next-gen, wealth planning, governance, art advisory and financing, global client services and access to the Citi PB Investment Lab.
“As clients think through their family office structures, the permutations are endless,”Ong, head of family office advisory Asia said. “And as a family office advisor, I’m able to bring all of Citi’s expertise to them.”
Bring out the essence of One-Citi
The “one bank” model has traditionally been a powerful tool for global banks to serve clients with both private and institutional needs. However, Wai feels that Citi’s version has an edge.
“A number of industry participants and banks have led with the “one bank” model very successfully, but we bring another dimension to our platform – our global network and connectivity. With our global presence, we have been able to offer things that set us apart from our competitors.”
He uses SPACs – an investment area that Citi was involved in because of the US lender’s global network and the fact that it is a US-originated solution – as an example. While activity may not have been high, he said the engagement and mindshare with clients was significant. “SPACs are US-listed products and by providing clients with the possibility to access these opportunities, that kind of mindshare is tremendous.”
For example, Citi IB last year worked along with Citi PB on a New York SPAC listing for Black Spade Capital, the family office of Lawrence Ho, owner of Macau gaming giant Melco Resorts & Entertainment.
The other part is the broader Citi platform, particularly on the institutional side, Wai said. He explained that one bank model revenue traditionally is focused on IPOs, block trade offerings on the equity side or bond issuances, but this year things have changed given the challenging market situation.
“This year we have a pipeline of activities that are not necessarily equity focused. We have items covering M&A activities, private equity and private debt fundraising.”
The new way for FOs to make money
While 2022 is a difficult year for clients to make money, he noted this year’s investment trends have been focused on de-risking and consolidating balance sheets, and more importantly, the playing field in investment has changed.
“Why does it only have to be pure investment plays? What about M&A or access to US assets? These are increasingly becoming options too,” Wai pointed out. FX has also been a key investment trend as it manages clients’ different exposures and enable clients to optimise their balance sheets for liquidity.
“Where there are interest-bearing loans, the focus is on repaying them,” he continued, adding that for clients that are cash-rich, they are looking into private deals, more in the early rounds – series B or C rounds of financing.
“We have private investments, and this is an area well-supported by our one Citi model. We have been approached by our more traditional institutional clients, seeing if we can potentially show some of these private rounds of equity raised into families. These conversations have been very fluid, and while ticket sizes are still not high, clients are still looking and learning.”
Delivering the whole integrated platform
Wai previously spent almost two decades on the institutional side of Citi before joining PB three years ago. He believes that family offices will continue to be a key trend over the next 10 years, and his core mission at “home” is to bring the value of Citi’s different divisions to the PB.
“As we continue to strengthen our one-bank approach, I think I can add strong value because I can connect the people both on the PB and FOG sides as well as on the investment banking side, and across our global markets franchise, so it was really natural for me to feel at home here.”
The Citi veteran added it takes relentless effort to deliver the one-bank platform smoothly by constantly tracking clients’ activities: “Who are the clients that we have engaged with in the past few years that we feel would be interested in certain types of deals? What sector do they like? What liquidity bucket do we believe they belong to?”
“We track this information with discipline, and we feel very proud of the progress we have made over the last few years. As and when the market turns to be less bearish and investors have a stronger risk appetite, we will be well-positioned to capture opportunities. This is where scale will come in.”
The key to a long-term relationship
Wai believes the personal relationships Citi’s private bankers and relationship managers have with ultimate beneficial owners (UBO) is unique.
“In Citi, the FOG always works with the RMs when engaging with clients as we build on top of that link, that trust, and the decades-long partnership between our bankers and their clients. A key mandate for us is to add the skill set of the institutional side on top of our ultra high net worth banking offering, and that’s why our one-bank approach is highly synergetic.”