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Morgan Stanley targets rich China entrepreneurs in Singapore

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Vincent Chui, who heads the bank's Asia wealth operations, say rich Chinese seem to prefer Singapore over Hong Kong as a base for family offices.

Singapore

MORGAN Stanley, the world's second-largest wealth manager, is beefing up its services for rich clients in Singapore, with a focus on Chinese entrepreneurs setting up family offices in the city state.

Vincent Chui, who heads the bank's Asia wealth operations, said in an interview: "The city is a key business hub for China entrepreneurs, as well as a family office nexus."

The bank hired Wee Yee Yeong to head its Singapore wealth business this year, and plans to add relationship managers in the city-state and in Hong Kong, he said.

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Morgan Stanley's focus underscores the significance of the family office industry in the South-east Asian nation, where the number of dedicated firms to manage the personal wealth of tycoons and their relatives quadrupled from 2015 to 2017, official data shows. Chinese millionaires are increasingly looking to set up offshore structures to protect their fortunes from the mainland's newly toughened tax regime.

Clients tend to prefer Singapore as a base for family offices over Hong Kong, where the wealthy operate more on an individual basis, said Mr Chui on Friday in a separate Bloomberg Television interview. Still, the bank looks at both markets for wealthy Chinese "as one", he said.

He said Morgan Stanley can provide services to business owners who are made wealthier following initial public offerings (IPOs) managed by the bank.

"We would like to position ourselves as a firm-wide partner to our customers," he said. When entrepreneurs look to do IPOs, the company brings in bankers from both the investment banking and wealth sides to help them figure out how the listing would affect their finances and family needs, he said.

Last year, Morgan Stanley led more than 20 offshore IPOs for Chinese private companies. Among the major Chinese share sales the bank helped manage in Hong Kong last year was Xiaomi Corp's US$5.4 billion IPO and Tencent Holdings' additional offering.

Morgan Stanley reaped a record pre-tax profit of US$4.5 billion from wealth management last year, going by a results presentation by chief executive officer James Gorman on Thursday.

Mr Wee joined Morgan Stanley from Bank of Singapore, where he was a senior executive focusing on Greater China and family offices. Mr Chui disclosed that the US bank plans to hire 50 relationship managers for both Hong Kong and Singapore over the next three years, bringing the regional headcount to around 150.

On top of this, the bank is seeking to recruit investment counselors, wealth planners and specialists for capital-market access and financing in the cities. A recent pause in a hiring spree by Asian private banks has given the firm a chance to find talent, said Mr Chui.

Private banks from the UBS Group to the Credit Suisse Group offer services to family offices of the wealthy by advising them on investments and helping to finance their transactions. Some also give advice on succession planning and philanthropy. Morgan Stanley managed US$2.2 trillion of assets in 2017, second only to UBS, said the London-based Scorpio Partnership.

In Asia, it ranks seventh.