22 September 2016 |

Collardi’s three-pronged China strategy: proximity, product and partnerships

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Julius Baer CEO Boris Collardi was in Singapore yesterday and he did not spurn the opportunity to reaffirm Asia’s status as the private bank’s “second home market”, while at the same exercising a modicum of caution over the immediate penetrability of China’s domestic market.

Speaking with Bloomberg, Collardi repeated what those of you who have been following Asian Private Banker’s coverage of Julius Baer this year will already know: the Swiss pure play has arguably been the region’s most aggressive hirer year-to-date, adding over 100 frontliners in Hong Kong and Singapore (or over half of the 200 new relationship managers added globally).

But the bank’s bullishness towards Asia as a whole does not completely extend to China, even as Swiss rival UBS blazes a bold trail into the domestic market by opening a flagship ground floor branch in Shanghai this year to complement its Beijing sub-branch.

“We’ve been following China for quite some years and I’ve been very modest about our ambitions in China because we don’t think that the wealth management market is as mature locally as one would have liked,” he said, adding that the regulatory environment – and specifically licensing – still favours domestic incumbents.

Instead, Collardi outlined a three-pronged China strategy that can be best summed up as: proximity, product and partnerships.

“First, [the bank is in] Hong Kong and Singapore serving Chinese residents in these two locations,” Collardi said, pointing to the offshore slant of Julius Baer’s China strategy. Currently, the bank ranks fifth in the region in terms of assets under management with US$75.1 billion (end-2015), according to Asian Private Banker’s data, although a raft of new hires in both offshore centres is likely to lead to an increase in this total, notwithstanding tricky market conditions.

“Secondly, [we are] developing product and services for that market that we offer directly and indirectly through partners.”

“And thirdly, strategic cooperation or direct investments.” Indeed, Julius Baer took a stake in Chinese wealth manager Jupai Holdings in December last year, with Collardi saying at the time that the partnership would “provide Julius Baer with valuable insight into one of the most successful players in Chinese onshore wealth management and further strengthen [the bank’s] expertise in China”.

Of course, Julius Baer is not the only foreign player with an eye on China.

In June, Bank of Singapore CEO Bahren Shaari revealed that he is exploring onshore partnership opportunities, as did Anna Mars, Standard Chartered’s global head of commercial and private banking segments, who earmarked 2017 as the year for a decision.

More recently, Mignonne Cheng, BNP Paribas Wealth Management’s chairman and CEO in Asia, told Asian Private Banker that the bank is “exploring opportunities presented by onshore centres” including China.