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[HONG KONG] US-listed Chinese wealth manager Noah Holdings Ltd said it has obtained a licence to offer trusts to wealthy Chinese in the offshore financial centre of Jersey, reflecting increased Chinese demand to allocate assets overseas.
Noah said it was the first Chinese wealth management company that had a licence from an offshore jurisdiction to carry out trust business.
Jersey, one of Britain's Channel Islands, is a well-known trust services centre and a gateway to investments in Britain. Trusts offer privacy and can be used to minimise the tax impact on investments.
A weakening yuan is increasingly pushing wealthy Chinese to try and move their investments abroad in spite of the country's strict capital control regime.
"We have talked to our clients who said global asset allocation was a must for them and the most important reason was that they hoped to diversify risks," said Kenny Lam, group president at Noah.
Chinese investors' hold on average only 4.8 per cent of their total investable funds in foreign assets, much lower than the 42.5 per cent seen in Switzerland, 39.8 per cent in the United Kingdom and 33 per cent in Australia, Lam said.
He said he expected the percentage of foreign assets held by Chinese investors to reach 9.4 per cent by 2020.
Noah set up its Ark Trust (Jersey) Ltd subsidiary in July and cooperates with Jersey partner JTC.
Lam said most of the funds Noah helps manage are already sitting outside of China or are leaving the country through regulated investment channels. The firm manages 18.4 billion yuan (S$3.71 billion) in Hong Kong and around US$50 billion globally.
The island, through its Jersey Finance marketing organisation, has been aggressively targeting Chinese clients for growth.
"Jersey Finance continues to see the Greater China region as an area of growth and opportunity for the future prospects of Jersey's finance industry," said Richard Corrigan, deputy chief executive officer of Jersey Finance in a press release.