If you ask Paul Lee, CEO and CIO of Paragon Capital Management, how the independent asset manager (IAM) has multiplied its AUM by six in under a decade, he might point to the firm’s discretionary model, and, perhaps surprisingly so, the complete lack of exposure to private credit investments.

“Now, whatever I say at this point in the market, you might think, ‘hey, that’s hindsight.” Fair enough. But honestly, I’ve never been a big fan of private credit,” he told Asian Private Banker.

While Lee is wary of highlighting any firms in particular, it is evident from recent challenges in the private credit space – starting with the collapse of auto lender Tricolor Holdings and car parts supplier First Brands Group last year – as well as ongoing difficulties facing some asset managers amid record redemptions requests since the start of 2026, that there are some risks the IAM believes are not worth taking.

“A key consideration in private credit that helps us allocate to these investments on behalf of our clients is the quality of underwriting standards behind these products,” he said.

“Once a typical private credit product goes online, underwriting standards may often become somewhat ‘relaxed.’ To me, that’s not ideal. So private credit has been deliberately missing from the suite of investments deployed for clients,” added Lee, referring to the ultra and high net worth individuals that the firm works with in Asia.

Paragon Capital Management managed roughly SGD1.4 billion in assets as of the end of 2025.

Performance matters

With the firm’s Paragon Systematic Advantage Global Equity (SAGE) Fund gaining by almost 20% in 2025, and its Paragon Alpha I fund increasing by nearly 20% last year on the back of positive results in 2024 and 2023, Lee believes that the IAM’s retrocession-free fee-only model incentivises the team to drive value, and also provides clients with assurance.

“We’ve built this business solely on management fees and or performance fees, depending on the strategy we employ,” explained Lee.

“That’s how we wanted to do it right from day one. Our fee-only model allows us to maintain complete alignment with our clients – they can go to bed each night knowing that if [our] team doesn’t deliver, their income can decrease in line with the portfolio. But if the portfolio performs well, we can also see a bumper payday at the end of the year,” he said.

Necessary partnerships

Lee also sees a growing need to expand partnerships with private banks to better serve clients.

While some Asia-based independent wealth managers may find such relationships complex to navigate—particularly where regulations differ across jurisdictions or private banks lack dedicated EAM desks—Paragon Capital Management often works with a broader network of partners, frequently out of necessity.

“There was a period about four or five years ago when our peers spoke about consolidating to just five or six partner banks for economies of scale. But our experience has been the reverse,” he said, noting that the IAM currently works with 16 partner banks across North America, Europe, and Asia.

“We [haven’t] actively pursued broadening partnerships. It’s more about reverse demand or inquiries from the clients and family offices we onboard,” he said.

“Typically, when we meet [a client], they’ll say, ‘I’m happy with you because you can oversee this, but I have financial institution ‘ABC.’” So we have to work with financial institution ‘ABC.’ The next family office says, ‘I have financial institution ‘DEF’ – please take care of them,’ and we oblige. This is how we’ve grown to this number over the years,” added Lee.

Wealth enablers

Lee views IAMs as “enablers” and expects private banks to remain central to the ecosystem, particularly as wealth continues to grow—underscoring the importance of maintaining strong relationships between independent wealth managers and their banking partners.

“What has evolved over the years is the clear recognition that IAMs play a role in growing and developing the private wealth space,” he said, noting that the day a private bank is “replaced” by an IAM is unlikely to come anytime soon.

“We are enablers. Through our work managing and improving the wealth situations of our clients and family offices, we inevitably benefit the platforms that support them. Private banks provide a very clear, large, and efficient platform for that,” Lee concluded.