Discretionary portfolio management (DPM) is gaining momentum at private banks like DBS and UBP, but scaling adoption remains a challenge. Innovation is critical to driving inflows, especially amid shifting client preferences in risk tolerance, asset allocation, and return expectations, factors further complicated by macroeconomic and geopolitical uncertainties.

At Asian Private Banker’s DPM 2025 Leaders Conversation in Singapore, industry leaders shared insights on how DPM teams are positioning for the year ahead. How are they incorporating alternative investments into mandates, and which asset classes are gaining traction?

DBS

At DBS Private Bank, investor appetite remains strong for fixed income and mixed-asset strategies. On the equity front, interest in China and Europe has grown as positioning was previously low, and growth momentum is rebounding from a low base, according to Christophe Marciano, head of discretionary portfolio management.

Marciano said DBS is seeing about 20% growth in DPM assets every year. And the bank has been tactically increasing equity allocations to Europe, while reducing US exposure due to policy uncertainty.

In credit, the bank maintains a high-quality bias amid tight spreads and macro risks but selectively adds high yield based on bottom-up opportunities. Alternatives remain overweight, with gold serving as both a risk mitigator and performance contributor, while broader alternative exposure has been further diversified.

“For some products, you have to pick the best player in the field,” said Marciano. “When you analyse those public market references in your private asset allocation, you realise that if you take an average manager, there’s sometimes little value in investing in private assets.”

“But when you pick the world’s best managers, you see a lot of difference. That’s where alpha is generated because you need the capacity to manage flows,” he added.

As competition grows, Marciano is seeing fund providers evolve, becoming either specialists or platform businesses while offering more services. He stressed that the level of transparency matters and access to portfolio managers is key.

UBP 

According to UBP’s Paras Gupta, the past two years have been strong for most asset classes, but recent weeks have brought increased volatility. As a result, risk management has become a key focus for discretionary portfolio managers. While always a core pillar, it has now moved to the forefront after a period of relative stability.

With the new Trump administration, the head of investment services Southeast Asia and head of discretionary portfolio management Asia, also echoed that this is creating a lot of uncertainty in terms of decision-making for company leaders, as well as for investors deciding where to allocate.

“This has resulted in changes in our portfolio strategies and the approach we are taking in discretionary portfolios. We believe that risk management this year is going to be the key,” Gupta explained.

UBP is seeing a shift in client preferences, with softened risk tolerance amid volatility and rising interest in alpha-generating alternatives and income-focused fixed income. Allocations are also diversifying beyond US-centric investments.

“Gold is also becoming a cornerstone of our portfolios in terms of risk mitigation efforts that we have put in place. Fixed income is perhaps not our most preferred asset class at this point in time, but within that, we are focusing more on pockets of generating carry as opposed to just taking pure interest rate risk,” he said.

As a result, discretionary portfolio flows at UBP have increased, with inflows into multi-asset and alternative strategies. Clients are increasingly seeking hedge fund-only mandates to complement their public market exposure.

Hamilton Lane

Hamilton Lane is seeing a growing interest from GPs and LPs in markets across Asia, particularly Japan and India, where the private markets firm sees numerous attractive opportunities. Anita Rana said the firm’s data shows that deal return dispersion in buyouts in Asia is higher, with loss ratios also being more pronounced.

“So we need to be very careful with selectivity, having the right access to deal flow, and being able to conduct due diligence and underwrite with utmost management,” said the principal of the portfolio management group, which has about US$956 billion in assets under management and supervision.

“All of that is of paramount importance. But we also see from the data side that if you look at Asia private equity versus Asia public equity, the alpha is greater than when you compare US private equity versus US public equity,” she added.

Rana explained that when it comes to Asian companies that generate more than US$100 million in revenue, more than 80% are still private. In India, in particular, favourable demographics and a growing economy are supporting innovation in technology.

“For example, the energy supply that the [Indian] government has to support this fast growing demographic is also coming into question,” she said.

“Japan, a very much under-penetrated social market, probably has another way of looking at demographics with its aging population, and healthcare and financial innovations will bring more and more opportunities for private markets,” she added.