UOB Private Bank is deepening its push into hedge funds, with healthcare emerging as its latest focus as wealthy investors look for strategies that can offer both defensive characteristics and exposure to long-term growth.

The Singaporean bank recently announced the distribution of a healthcare specialist equity long/short strategy run by Seligman Investments, Columbia Threadneedle’s alternative business.

For UOB Private Bank, the appeal of healthcare lies in the breadth of opportunities it offers – from defensive healthcare services and managed care businesses to more growth oriented areas such as biotechnology and pharmaceuticals.

“While investor attention has focused on AI and tech, healthcare offers a diverse opportunity set for investing because [investors] get exposure to a broad spectrum of subsectors from defensive businesses like healthcare services and managed care, all the way to very innovative, tech-driven areas like biotechnology and pharmaceuticals,” Meng Keet Wong, UOB Private Bank’s head of managed products and alternative investments, told APB in an interview.

Hedge fund demand picks up

The move comes as demand for hedge funds and other alternative strategies gathers pace among private-bank clients in Asia.

Columbia Threadneedle has onboarded four private banks in Asia to distribute its healthcare strategy this year, with more than US$500 million in client assets gathered across the banks, according to Mark Chan, managing director, head of wholesale, Asia and head of institutional, Greater China and Southeast Asia.

As of the end of August 2026, the US$715 billion asset manager raised over US$2.2 billion in net flows from its sector alternative business in Asia, which was launched around four years ago. Nearly two-thirds of that, or US$1.5 billion, came this year alone, Chan told APB in a separate interview.

The flows have all come through the private wealth distribution channel, he said.

“Today our footprint has expanded to around eight private bank partnerships across Asia for our technology long/short capabilities,” he said. “This year is when it started to take off where we onboarded four private bank partnerships [whereas] over the last two years we saw demand from family offices [or] institutional businesses.”

The pickup in demand comes as investors reassess the role of traditional asset classes in their portfolios. APB survey data shows four in five private banks in Asia expect client allocations to alternatives to increase, while hedge funds are among the strategies seeing the strongest demand.

By the end of Q2 2026, the global hedge fund industry soared to a historic US$5.6 trillion in assets, according to the latest HFR Global Hedge Fund Industry Report. 

“Many investors are concerned about the size of the growing [US] national debt, the fiscal situation, and the ability of the [US] administration to manage inflation. If investors think the equities market could be elevated and the bond market is behaving erratically, it’s not surprising that investors turn to alternatives,” Wong said.

He added that much of UOB’s alternatives AUM, including private assets and hedge funds, is funded by cash or excess liquidity.

Why healthcare?

For Columbia Threadneedle, the attraction of healthcare goes beyond its defensive characteristics, with the sector offering a combination of valuation catch-up, structural growth and innovation.

Kosta Kleyman, the healthcare portfolio manager for Seligman Investments at Columbia Threadneedle Investments, sees the healthcare sector as a “catch-up trade” after it has been a laggard for the past few years, which can be positioned as both a “hedge to the high-growth sectors” and “a unique component of true innovation.”

“New methods of treatment, whether that’s cell therapy, gene therapy, new ways of treating cancer, breakthroughs in neuroscience using old approaches but a new way of therapy – that’s all additional growth areas that aren’t valued fully yet,” Kleyman explained.

“In the past year, there has been an acceleration of mergers and acquisitions in biotech, as well as the emergence of Chinese biotech as a competitor to existing biotechs and a source of assets to pharma,” he said.

The strategy has also benefited from the sector’s relative performance. Columbia Threadneedle did not disclose the fund’s specific return but noted that, since the fund’s inception three years ago, it has outperformed the benchmark, the MSCI World Health Care Index, which is up over 21% on a one-year return basis as of 4 September.

Why long/short?

For Wong, equity long/short stands out among hedge fund strategies as “the most transparent [and] the most straightforward to understand.”

Compared with the benchmark, Wong said equity long/short strategies should capture at least two-thirds to three-quarters of the upside with only half of the downside over a long period of time.

“I don’t expect long-short managers to keep up with the market in a bull run, but I do expect them to be much more defensive in the down market,” he continued.

That defensive characteristic is particularly relevant to the healthcare strategy, which combines exposure to more defensive businesses such as healthcare services and managed care with growth-oriented areas including biotechnology and pharmaceuticals.

“There is strong demand for hedge funds across the industry right now, and sometimes I wish I had more hedge fund solutions, but I would rather keep the product shelves tightly curated and focus on the quality of the offering rather than be carried away by the pedigree of the manager or the brand name,” he said.