Pictet bets on Asia expansion; aims to double team of bankers

Singapore

PICTET Wealth Management (PWM) is pursuing a growth strategy in Asia, where it plans to double its team of bankers over the next few years.

Boris Collardi, Pictet Group managing partner and co-head of PWM, said the firm will hire 10 to 15 bankers a year over the next four to five years, which will result in a doubling of its current team of 52 relationship managers in the region.

"We can say that today Pictet in terms of market penetration and size is not where it should or deserves to be in Asia. We have decided to create a focused strategy on Asia that is a growth strategy, that relies on developing Asia on two pillars - North Asia mainly from Hong Kong; and Southeast Asia from Singapore.''

The Pictet Group manages a total of about US$530 billion, of which PWM comprises about US$222 billion as at end-March.

Pictet will capitalise on its strength in asset management, as well as extend lending to private clients. The firm last year obtained a wholesale bank licence in Singapore, which allowed it to offer services such as Singapore-dollar denominated deposits and loans. "We're also using our balance sheet to extend lending to clients. We don't use it as a hook, but in the context of a client relationship,'' he said.

Next year the bank will also roll out an advisory solution in Asia. The solution, which launched this month in Switzerland, comprises four mandates defined according to how involved a client may want to be in the investment advisory process, as well as access to research and single asset class specialists. It is understood that the solution will involve an advisory fee.

"We're moving from a model of a custody and transaction fee, and getting into an all-in and advisory fee based on the type of mandate and asset size... It's our responsibility and job to create new value for clients.''

Pictet says the take-up of its discretionary solution is strong in Asia, where discretionary portfolios have a penetration of about 20 per cent, compared to an industry average of less than 10 per cent. Globally, penetration of discretionary portfolio services for PWM clients stands at 40 per cent.

On investments, it has raised €$550 million for its first direct real estate fund investing in European property. The fund is managed by Pictet Alternative Advisors which manages US$26 billion in assets, including hedge funds, private equity and real estate. Asian investors accounted for about a quarter of the assets raised. The fund - Pictet-Real Estate Capital, Elevation I - has soft closed to new monies.

On markets, Mr Collardi said the firm is advising clients to be "relatively cautious'' overall. "We've been telling clients to be prudent on several fronts. I don't think we'd have a large double digit correction, but at some stage, a correction may come. Central banks are now accommodative, so as not to curb the fragile growth.''

PWM's latest house view takes a "globally cautious'' stance on equities, as "our analysis suggests that expansion of valuations from here is limited''. "We expect equities to perform sideways in the coming weeks, but with the possibility of rotation towards quality cyclicals.''