With performance dispersion widening in an increasingly uncertain world, very few alternative managers are now managing to meet the strict selection criteria of Asia’s private banks, according to private banking alts leaders at the Asian Private Banker’s Alternative Investments Summit 2026 in Hong Kong.

The panel discussion, Macro outlook of alternative investments: Innovations, potentials, new insights, dissected how private banks are not solely looking for attractive returns but are emphasising the importance of building resilience amid market stress, and how boring businesses can often be better.

This is how private banks select managers

At UBS GWM, a predictable future trajectory is crucial. By working continuously with partners and monitoring data across rounds of capital raises, Pierre Widmer, head of advisory and sales for North Asia, pays attention to whether the interests of GPs and LPs are aligned and whether style drift occurs over time.

“The critical part is the ‘crystal ball’ — looking into the future. Is this manager going to deliver continuously?” asked Widmer. “Is maybe too much capital being raised? What kind of investors are they onboarding?”

At J.P. Morgan Private Bank, while transparency and diversification remain priorities, Albert Yang, head of alternative investments, Asia, said the bank also values information on the types of strategies, underlying positions, and regions traded by alternative managers.

Narrowing down to the evergreens space, Yang said metrics span from the amount of money taken each month and quarter to how that money is managed, and from how quickly money is deployed to what underlying companies it is lent to.

“Now, I think you need to pick the right manager going forward. Whether it’s inflation, interest rate, and tariffs, with all the issues around the world, not everyone will come out to be a winner,” said Yang.

Julius Baer favours multi-asset managers and strategies. However, William Fong, head of alternatives specialists for Asia and the Middle East, pointed out that it has to be a two-way street, where managers must demonstrate credibility and stand out among peers.

To Fong, the nuances lie in how managers make funds complementary to one another so they do not overlap with other private-market strategies, and the magic leans toward the closed-end, drawdown side.

“If you look at the top performers that have twenty years of track record, high AUM, low volatility, there are only a few that meet the strict criteria,” said Fong.

Weathering market stress

When helping clients in their alternative investment journey, Sami Abouzahr, global head of investments and managed solutions for HSBC Wealth and Premier Solutions, believes it is key to help them understand the risks and unintended correlations in their portfolio.

The bank’s alternatives advisory also maps out how clients’ portfolios would perform in different scenarios. This has been well received by clients, especially given that current market stress can be extreme, even in safe-haven assets, according to Abouzahr.

“Sometimes we lack the imagination to come up with a fake Greenland attack or Venezuela invasion, but we do our best, and that is what clients really appreciate,” said Abouzahr. “That’s the kind of journey that we are on with them, to get them on a level of diversification to create resilience.”

With many clients holding alts with attractive gains, Fong believes private bankers should protect those gains, making drawdown limitation crucial. In the past four to five years, Fong observed drawdowns of 20% to 30% during the pandemic, interest rate hikes, and liberation day.

At Julius Baer, this is achieved by maintaining two to three funds per asset class, which serve as core building blocks for diversified exposure while complementing clients’ portfolios, according to Fong.

“Our clients are probably well off enough to tolerate that, but whether a private banking relationship can tolerate that loss is completely different,” said Fong.

The more boring, the better

As clients increasingly allocate to alternatives across a broadening spectrum of strategies and solutions, Yang believes “boring businesses” are key to helping clients tap into niche opportunities that cannot be accessed directly in public markets. This return can be further boosted if the right skill sets are in place to operationally improve them, according to Yang.

“We love boring businesses, because those are typically the ignored, the less capital-chasing ones,” said Yang.

This strategy is echoed by Diane Raposio, partner and head of Asia credit and markets at KKR, who focuses on supporting boring but high-quality companies, particularly on the credit side, across a range of sectors. She believes this is especially true in the alternatives space in Asia, given that liquidity is limited, making the analysis of which companies to lend to extremely important.

“Understanding who you lend to is critical, and then understanding – is that business going to be boring? Is that business going to survive the next cycle? Is that business going to survive any disruption?” said Raposio.