Asia is front and centre of Pictet’s new five-year growth agenda for its global wealth management business that is jointly overseen by Boris Collardi and Rémy Best, both partners of the Swiss bank.
The wide-reaching plan, unveiled to Asian Private Banker by Collardi, covers market strategies, product and services, and operations, and is the outcome of a year of “observation, learning, and understanding” for the high-profile banker who formally joined Pictet last year after an eight-year spell as CEO of rival Julius Baer.
It distinguishes between Pictet’s ‘foothold’ European wealth management business, which currently accounts for the majority of client assets and where the emphasis will be on consolidating and expanding its onshore footprint, and the international ‘growth markets’ of Asia, Latin America, Eastern Europe, and the Middle East — regions where Collardi said Pictet’s business “still offers lots of development potential” but where there is “not a single market without a clear upside” — with Asia to receive the lion’s share of resources.
Collardi said resources would be allocated according to “the potential of markets”, with the bank retaining its focus on Asia’s UHNW segment given that “there are a lot more [ultras in the region] who don’t have a relationship with Pictet than those who do”.
“If I look at our book of business here [in Asia], North Asia I would say is good in terms of Hong Kong and Taiwan, but we still have very low exposure to Chinese residents,” he told Asian Private Banker.
“Similarly, in Southeast Asia, our book is concentrated on Singapore, NRI and international business. So our priorities are Greater China and, in Southeast Asia, Indonesia, Thailand and the Philippines — not to forget Singapore,” Collardi said, adding that in Asia, the bank already has in place the requisite platform, processes, and offering from which to springboard.
Accordingly, Pictet aims to add about 200 senior bankers to its global wealth management business over the next five years, with 30-40% going to Asia.
[We] have only scratched the surface in terms of our potential
“The good news is that Pictet has a great brand name, a fantastic platform and infrastructure, a multi-billion dollar book, and a roster of very senior bankers in the region,” said Collardi.
“So this is by no means a startup. We are not here in a day-one situation where you need to bring your own chair to the office, and yet we have only scratched the surface in terms of our potential.”
However, Collardi emphasised that the bank is under no pressure to meet its target and would proceed selectively in a market where it can “afford to choose” who it works with.
Yes, we could be more vocal, but our business model allows us to take a long-term view
That extends to potential strategic tie-ups in the region. Pictet is currently conducting a market analysis of partnerships but has yet to reach a conclusion on which, if any, model is suitable.
“It is difficult for me to offer a verdict because, quite frankly, everyone tells me their [partnership] is ‘great’ and ‘working fantastically’. Some models look interesting but I am not aware so far of partnerships with truly measurable success,” Collardi said.
“But before we can run, we need to walk. Yes, we could be more vocal, but our business model allows us to take a long-term view and we will, therefore, make announcements in due time.”
Rather, Collardi said Pictet would complement its hiring activities with upgrades to its platform and services that include an expanded advisory offering that will be rolled out in Asia by Q1 2020, after going live in Switzerland earlier this month.
Partly a response to the regulatory environment and also a means for Pictet to increase its wallet share of clients, the service will launch with four mandates and a set of digital tools, according to Collardi, who said Pictet has traditionally been viewed as a money manager and less so as an advisor.
“On this front, we will catch up with others in the market,” he said.
Family office focus
The bank has also placed a priority on Asia’s growing family office segment and recently launched a dedicated family office unit that is overseen by intermediaries veteran Pamela Phua, who joined the bank from Julius Baer in May.
The family office team serves two purposes and draws on the Swiss bank’s experience in multi-generational wealth management, explained Collardi.
One is to function as a ‘competence centre’ for sharing best practices and exchanging ideas among family offices, and as a resource for bankers with clients who are looking to set up a family office by advising them through the process. The other is to focus exclusively on family offices and select multi-family offices in the region in terms of deploying Pictet’s suite of products to quasi-institutional investors.
Pictet is also looking to emphasise its alternative investments capabilities amid robust — and growing — interest in Asia for the asset class and an industry-wide clamour to sate demand, especially for private equity.
The bank recently ventured into the direct space with a European real estate opportunity and its private equity fund of funds offering is on Vintage Five, “with remarkable performance”, according to Collardi, who believes the sweet spot for Pictet lies in offering smaller, more niche strategies.
“There are those big funds that have raised a huge amount of money and are very well-run firms, but which are a bit undifferentiated,” he said, adding that a good research team will find the “smaller, lesser-known funds that cannot be accessed so easily — be they China or Singapore or São Paulo-based private equity firms”.
“So if you put those together, you can also deliver outstanding performance with diversification. I think typically for Asia, this is one of those areas we would like to build on,” he continued.
[You] cannot be one of the most solid and safest banks in the world and at the same time go out there with an aggressive credit strategy
Meanwhile, Collardi acknowledged that Pictet could do more to communicate to the market its credit capabilities but rejected assertions that the bank does not deploy its balance sheet sufficiently to woo Asia’s ultra segment.
“I’ve had many people approach me and say, ‘Pictet doesn’t do any lending’, but the reality is we offer interesting solutions, particularly for Lombard credits. And you cannot be one of the most solid and safest banks in the world and at the same time go out there with an aggressive credit strategy,” Collardi explained.
He said the bank would not follow others in the region by using credit as a door-opener for relationships but, instead, would deploy its balance sheet “wisely” and “selectively” as a value-add.
Operationally, Pictet will continue making enhancements to its independent IT platform — what Collardi said is a core strength of the group — and is currently onboarding new tools for its advisory offering and improving control and support functions.
“We have a clear roadmap for these upgrades and it is correlated to our market and product strategies,” he added.
I am a firm believer that we have to create our own success here in Asia
Collardi said the five-year plan, as extensive as it may seem, essentially aims to “bring the existing and already-solid foundations of [the wealth manager] in Asia to new levels” — and not to fix something that doesn’t work.
“I am a firm believer that we have to create our own success here in Asia,” he continued.
“And many people will say that you cannot successfully develop a strategy without an investment banking arm, but I strongly disagree. You just need to be smart and connect with the industry — with investment banks that don’t have a private bank, with private equity businesses because they now do lending — and in Pictet’s case, use our unique advantage of being a Swiss private partnership business with a disciplined risk management culture.”
“And then there is the fact that our brand is not yet well known in the region. That brings with it an attraction,” Collardi concluded.