Best pure play private bank in Asia 2023
Union Bancaire Privee
One of Switzerland’s best-capitalized institutions, Union Bancaire Privée, has slowly but surely showcased that leadership in Asia since its regional business was set up in the early 1990s.
The private bank, under the leadership of Asia CEO Mike Blake, runs busy offices in Hong Kong, Singapore, Tokyo, Taipei, Shanghai and, most recently, Hainan. Its European pedigree and regional experience leave it well placed to serve the full range of Greater China markets, southeast Asia and non-resident Indians.
The numbers are impressive. UBP’s wealth and asset management businesses oversee some $27 billion of client wealth. By UBP’s three key metrics, the Asia team is on a roll, with a five-fold rise in operating profits since 2017, an average 12% growth per annum in assets under management since 2016, and an enviable 70% of assets coming from clients who hold more than $10 million with UBP.
Last year was tough. Traditional investment products were hit by interest rate volatility around the globe. This gave UBP an opportunity to increase its focus on foreign exchange by substantially expanding this part of the business.
With higher implied option volatility and rising deposit rates, UBP’s currency team gave priority to bringing FX ideas to non-FX clients at a time of higher borrowing costs. With the US dollar hitting multi-decade highs and uncertainty about Federal Reserve tightening, UBP also sought investment ideas on non-US dollar cross rates, which at times showed greater returns when translated to dollars.
In the year ahead, the plan is to continue looking for opportunities as central banks throttle back on rate hikes. The bank believes the FX business will continue to follow the strong momentum seen in the last three years.
UBP has long prioritized structured products that offer customized and bespoke solutions to clients. In the current environment, however, clients want something else: capital preservation, hedging options to mitigate downside risks, and diversification from traditional structured product concentration and equity flow products into more non-flow and cross-asset products.
UBP had their backs, a feat that makes it the best pure-play private bank in Asia in 2023. It introduced a range of product offerings such as credit-linked notes, rate-linked notes and fund-linked notes. The team is also developing its own structured product trading and issuance capabilities in Asia. In July 2022, UBP appointed an Asia structured products trader and a head of structured products.
The bank’s Hainan office opened in June 2022, securing a qualified domestic limited partnership (QDLP) licence which allows UBP to offer global investment strategies to qualified domestic investors. UBP is the first Swiss wealth and asset manager to open a QDLP-qualified office in Hainan, and it is now in the final stages of due diligence for its first fund launch on the southern Chinese island.
UBP wins a further award this year, for being the best for discretionary portfolio management in the region.
Client goals and aspirations have always been unique. So is the bank’s DPM service. But the team did have to contend with big shifts in clients’ risk profiles in the past year, and their eagerness to be involved in all strategic investment decisions at a time of global volatility.
As a result, UBP was a partner to clients looking to grow their assets over time, but in their own idiosyncratic ways.
UBP’s core values of conviction, agility and flexibility helped. With equity allocations, for example, flexibility in 2022 involved quick shifts from being growth-focused to having a more diversified level of exposure. Within UBP’s fixed income allocations, that meant turning defensive, shortening duration and switching to a range of alternative strategies. That’s how the bank managed to steer clear of credit events in Asia and beyond.
In 2022, relative returns on different asset classes ranged from 8% to 15%. That track record, and the bank’s overall expertise, helped it to acquire a number of new and large fixed income mandates in the second half of the year.
The firm is also keen to expand its UBP U Asset Allocation investment solutions. This is built on the proprietary UBP process to achieve wealth objectives via a single, dynamic investment. Importantly, it can also include sustainable investment strategies – yet another way for UBP to stay on top of its game.