Asiamoney China's Best Wealth Managers 2020
Wealth management firm of the year: CreditEase Wealth Management
Best wealth manager for fund of funds: CreditEase Wealth Management
Best wealth manager for technology: CreditEase Wealth Management
At CreditEase, the number of clients and the assets under management both increased in 2019. The number of clients with at least Rmb1 million ($140,225) rose, helping assets under management top Rmb100 billion by the end of 2019, a year-on-year increase of more than 20%.
|Hou Lin, CreditEase Wealth Management|
CreditEase was founded by Tang Ning, its current chief executive, but the wealth management arm is now run by co-presidents Hou Lin and Shang Xiao. The company conducts business in more than 40 Chinese cities and has offices in Hong Kong, Singapore, Europe, Israel and North America.
CreditEase provides Chinese high net-worth individuals with wealth management, investment and consulting services, covering a broad range of areas including cash management, fixed income, private equity, capital markets, real estate and insurance.
It offers multiple currencies to its clients, and dollar-denominated products made up more than half of its AuM.
Its international business has benefited from long-term relationships with Blackstone Group, Morgan Stanley, KKR, Tishman Speyer and Wellington Management, as well as partnerships with the likes of Amundi Asset Management.
The firm has continued to break new ground. It partnered with China Galaxy Securities in January 2019 and the local government of Sanya city, Hainan province, in April.
CreditEase’s fund of funds was one of the first to be included in the Rmb50 billion technology and innovation FoF set up by Qingdao city in Shandong province in May. The firm launched its first charities trust in Hangzhou last year.
CreditEase is able to provide family trust services not only in mainland China but also in the US. The number of family trusts it structured in 2019 rose 130% compared with the year before. Last year, CreditEase also launched its family office headquarters in Sanya.
CreditEase is a pioneer in China’s FoFs market, with over Rmb40 billion of AuM. While in terms of absolute size it may not be the largest, the characteristics and performance of its FoF products make it a worthy winner of our Wealth Manager for Fund of Funds award.
|Shang Xiao, CreditEase Wealth Management|
Its private equity FoF was highly diversified, with stakes in more than 200 funds globally. The investments were made, either directly or indirectly, in over 4,000 high-growth companies around the world, 200 of which were listed.
It worked closely with such well-known names as Blackstone, Wellington, Credit Suisse and other players such as French private equity company Ardian and US venture capital firm Ribbit Capital. By August 2019, over 90% of its private equity FoFs had a history of at least three years of delivering better returns than the industry average.
Home to almost 200 web development and data technology experts, CreditEase is also our pick for Asiamoney’s Best Wealth Manager for Technology award.
Fintech has always been at the core of CreditEase’s strategy and one of its key strengths. The CreditEase Fintech Investment Fund, a dual currency (renminbi and dollar) fund set up in 2016, has grown to more than Rmb6 billion in size. CreditEase also combines blockchain technology with its family trust business and social finance.
Last year, it upgraded its app to a 5.0 version, introducing new functions for both new and existing clients, with easier account-opening, online trading and appointment-making processes.
It has also continued its investments in an artificial intelligence platform that analyzes private equity funds and other investments. The system covers 25,000 Chinese institutions, 80,000 funds and two million corporations.
Best wealth manager for overseas asset management: Noah Holdings
Noah’s overseas assets under management reached Rmb24.8 billion ($3.49 billion) in 2019, some 14.6% of the company’s total AuM. Its net income from overseas also jumped, rising 25.4% last year to hit nearly Rmb1 billion. Its contribution to the company’s overall revenues rose by 5 percentage points, to 27.9% from 22.9%.
Noah Holdings’ network outside mainland China spans Hong Kong, Taiwan, Singapore, Melbourne, New York, Silicon Valley and Vancouver.
That is a crucial selling point to the firm’s 290,000 high net-worth clients, who regard Noah as one of the few local wealth managers able to bridge the offshore and onshore markets.
Noah, which is listed on the New York Stock Exchange, is the partner of choice for many premium global wealth managers when it comes to China-related business.
Noah, co-founded and still chaired by Wang Jingbo, has launched and managed more than 120 funds denominated in dollars. It maintains strategic partnerships with over 35 global fund managers, including the Blackstone Group, Carlyle Group and Oaktree Capital Management, while cooperating with nine of the world’s top 10 private equity funds.
The firm still sees room for expansion. In Australia, it secured an alliance with Voltaire Partners for family office business in 2018 and partnered with 140-year-old Marsh Advantage Insurance last year. That paved the way for Noah to launch wealth management and investment services for local Chinese HNW individuals and corporations, as well as providing insurance plans for both the families and their businesses.
Last year, Noah was awarded three licences in Canada, making it the country’s first fully licenced wealth management company with a Chinese parent.
The wealth manager’s overseas strength is also noticeable in its family trust business. Noah’s domestic Chinese trust business started in 2017, but it had already set up Ark Trust (HK) Co in December 2014, and in 2016 became the first Chinese firm to obtain a family trust licence in Jersey. To date, Noah has managed more than 230 family trusts inside and outside China.
Having secured a Capital Markets Services licence from the Monetary Authority of Singapore in March, it looks like the manager is well on the way to adding more value to Chinese HNW individuals for their growing overseas asset management needs.
Best fund house in wealth management: Harvest Fund Management
|Zhao Xuejun, Harvest Fund Management|
Harvest may not be the largest fund manager in China, but it has managed to deliver stunning returns for investors year after year.
By the end of 2019, Harvest provided services for more than 100 million investors and it manages assets worth over Rmb1 trillion ($140 billion). That sum includes mutual funds worth nearly Rmb526.2 billion. According to Wind, its non-money-market funds grew Rmb72 billion to Rmb286.7 billion in 2019.
Harvest was one of the most active managers in terms of launching new funds last year; it ranked second, launching new funds worth Rmb68.7 billion, which made up 4.78% of the total new funds in the market, according to Wind data.
The average return of its equity funds was a whopping 42% last year.
Harvest owes part of its success to a stable senior management team. Chief executive Zhao Xuejun’s 17-year tenure makes him the longest-serving boss of a Chinese fund manager. When Zhao became chairman at Harvest in 2018, the firm’s chief investment officer for fixed income, Jing Lei, took over as CEO. He leads a team of senior managers with an average of 10 years of experience.
Harvest has a strong institutional client base. It was the largest manager of social security and pension funds in 2019, and one of the biggest in managing insurance assets.
Since the establishment of its international arm, Harvest Global Investments (HGI), in Hong Kong in 2008, Harvest opened for business in New York – a first for a Chinese manager – in 2012 before opening a London office three years later. HGI now manages over $4.8 billion of assets for overseas clients, which include sovereign wealth funds, and in 2019 it launched new funds in Singapore and Taiwan.
Harvest achieved a few milestones in 2019, including becoming one of the first five Chinese fund managers to receive an investment advisory qualification. It also brought a number of innovative products and services to the market last year, including more than 40 new funds. It launched the Asia fixed income Ucits (Undertakings for the Collective Investment in Transferable Securities) fund in 2019, one year after it brought out the China-focused version.
Best securities house in wealth management: China International Capital Corp
CICC became a pioneer among securities houses in China when it ventured into wealth management in 2007, setting an example to rivals who have only recently recognized the potential of the wealth management sector.
CICC’s wealth management arm has grown from a team of just 10 in its early days to more than 100 professionals at what it now describes as a one-stop wealth services centre covering trading, investment management, financing and other solutions and services that link wealth management with its strong investment banking franchise.
The number of clients grew 8.6% year on year to 3.27 million in 2019, with 19,000 high net-worth (HNW) individuals whose average assets exceeded Rmb23 million ($3.2 million). Their total account balance at the end of 2019 reached Rmb1.84 trillion, or 42.5% higher than a year ago.
For its HNW clients, the balance stood at Rmb460.3 billion.
CICC, which named Huang Zhaohui as chief executive in December, has the infrastructure to support its large client base and steady growth, boasting a network covering 29 administrative regions, including Hong Kong, with 18 branches and 226 business departments nationwide.
The eye-catching numbers aside, 2019 was an eventful year for CICC. It officially launched the newly branded CICC Wealth Management in October, incorporating the wealth management business founded in 2007, as well as that of China Investment Securities Co (CISC), following a restructuring that started in 2016. To CICC, the integration of the two platforms was a strategic upgrade and marked yet another milestone for the company.
The firm also launched its global family office (GFO), eight months after naming 20-year CICC veteran Liu Man as the head of the business. The 12-member GFO team serves ultra-high net-worth (UHNW) families with over $50 million of assets available for investment. About 30 families, with combined assets exceeding Rmb1 trillion, have already come on board CICC.
Leveraging CICC’s investment banking strengths, the GFO also handled Rmb20 billion worth of equity block trades for 100 listed companies and their shareholders. But providing investment banking services is not the only aim for the GFO, which has also set up family trusts for 60 or so clients since its launch.
Best trust firm in wealth management: Minmetals International Trust
|He Fei, Minmetals International Trust|
Minmetals Trust’s wealth management arm serves tens of thousands of high net-worth individuals and corporate clients, providing asset allocation across all markets through its flagship Heng Xin product line, which offers underlying assets ranging from infrastructure projects to supply chain finance.
The firm, majority-owned by state-owned enterprise China Minmetals Corp, hired He Fei from Ping An Trust to run its wealth management division in 2019. It expanded its presence in China to cover a total of 22 cities in 2019, with a team of 350 wealth managers, over two thirds of whom were new hires.
At the same time, Minmetals was well aware of the limitations of focusing only on expanding on the ground. That prompted it to invest in developing an online platform to attract new customers and maintain existing ones, upgrading its system and opening a VIP account for its clients in 2019.
Those efforts meant Minmetals was able to considerably outgrow its Chinese peers.
In the retail market, the sales volume for Minmetals’ wealth management products reached Rmb47.5 billion ($6.7 billion) in 2019 – 3.6 times what was recorded a year ago. The number of clients increased 270%.
In particular, the number of clients with at least Rmb10 million of trust assets more than quadrupled, reaching almost 1,000 by the end of 2019.
The outstanding scale of the trust assets managed by Minmetals increased by nearly 48% in 2019 to reach Rmb885 billion. Its revenues were up almost 42% to Rmb4.16 billion, with a 22.3% increase in its net profits to over Rmb2.1 billion.
Minmetals’ expansion has been careful, eschewing high-yield products in exchange for a sharp focus on risk management. That has helped it keep its old clients happy while adding a few new ones.
Best provider of family office services: Deyu Family Office
|Zhang Yong, Deyu Family Office|
Deyu may still be young in global terms but it was one of the earliest multi-family offices established in China. The MFO was founded over four years ago by Zhang Yong, a senior banker who had previously helped to set up the private banking department at China Minsheng Bank.
It has 40 family clients with at least Rmb2 billion ($280 million) in assets, and more than 160 high net-worth clients with assets over Rmb100 million. These include some of China’s wealthiest people: the richest client has overall assets of about Rmb80 billion.
Deyu has a team of 25, making it one of the largest MFOs in mainland China. It already represents clients across Beijing, Shanghai, Hong Kong and New York, and plans to open a Shenzhen office this year.
In 2019 alone, Deyu advised close to 100 clients with over Rmb1 billion in wealth planning and product allocation, across fixed income, equity and alternative assets.
It started offering funds of funds last year. Deyu also advised five clients on investment banking in Rmb3 billion worth of transactions. It provided tax services to 10 clients. Together with its Hong Kong and New York offices, Deyu was able to help tens of families in global asset allocation, education, offshore trust and overseas insurance.
Last year, Deyu helped families make wealth succession plans relating to Rmb100 billion of their assets. The clients Deyu assisted in family business governance included two businessmen that were the wealthiest in their respective provinces.
The words used by clients to describe Deyu were professional, warm and family-like, according to appraisals seen by Asiamoney.
Appreciation of the MFO is reflected in the fact that over 90% of the clients who consulted with Deyu chose to extend their contracts. In the meantime, no one has chosen to withdraw business at the firm, while some families even asked for a life-long contract.
In a relatively new – and therefore underdeveloped – segment of the vast Chinese wealth management market, Deyu has set an admirable example of what MFOs can and should be.