Endowus acquires HK-based multi-family office, expands into ultra-wealthy market

DIGITAL wealth platform Endowus has acquired Carret Private, a Hong Kong-based multi-family office, giving it a foothold in the ultra high-net-worth (HNW) wealth segment of clients.

Through Carret, it now also has a minority stake in another multi-family office, Lumen Capital Investors, based in Singapore. The deal has enlarged Endowus’ assets under advisory from around S$2 billion as at August this year to a total of US$4 billion.

Endowus itself is a robo advisory platform. It has its own private wealth service to create customised solutions for HNW clientele.

The Carret deal is another step forward in Endowus’ expansion into Hong Kong. Earlier this year, it secured a licence from Hong Kong’s Securities and Futures Commission. It also appointed Steffanie Yuen as head of Hong Kong; she has over 12 years of experience in fintech, wealth management and investment banking

The partnership stands to benefit from tailwinds arising from a number of trends, such as the influx of family office monies into Singapore and the region; the growing awareness and demand among the ultra wealthy for independent wealth advisory; and the burgeoning of digital wealth services riding on WealthTech.

The emergence of a younger generation of wealth owners – either newly-minted millionaires or heirs to established family fortunes – is also likely to spur demand for independent advice and digital services.

In a statement, Endowus chairman and chief investment officer Samuel Rhee said: “The combination of Endowus, Carret Private and the partnership with Lumen will allow us to scale and grow faster, and lead the industry towards greater transparency and integrity in providing the highest quality wealth advisory services as fiduciaries and the lowest cost access to solutions that help our clients achieve better outcomes.”

Endowus said it is the first in Hong Kong to offer a 100 per cent trailer fee rebate to clients. Since it was established in Singapore in 2017, its mission has been to address the pain points of high costs and “misaligned incentives that often lead to poor investment advice and outcomes for clients’’. With the deal, it has become “vertically integrated’’ to serve different client segments.

Carret Private describes itself as a multi-family office for ultra HNW families. It takes its name from Philip Carret, who pioneered the concept of value investing and established one of the world’s first mutual funds, the Pioneer fund. US-based Carret Asset Management was founded in 1963 as a family office, and adviser to institutions and HNW families. Carret Private was licensed in Hong Kong in 2018.

Kenneth Ho, managing partner of Carret Private, said the acquisition comes “at the perfect time” as the region experiences substantial growth in independent wealth management.

“At a time when larger private banks are consolidating their bottom lines, clients are now more than ever, demanding unbiased independent and transparent wealth advice,” he said. “This acquisition will help Carret Private to meet the three key trends in our industry of meeting the digital demands of our clients; creating more transparent, fee-driven businesses, and helping us to expand into the private markets asset class.’’

Endowus recently announced private market and alternative solutions, with partners such as Blackstone, Bridgewater and KKR. Its offerings will be made available to both accredited and professional investors.

According to Statista, WealthTech firms in the region hold more than US$200 billion in assets under management (AUM), a five-fold jump from just four years ago.

For wealth management in the Asia-Pacific region, PwC projects AUM to reach US$29.6 trillion by 2025, nearly double the levels seen in 2017. This is expected to come with a generational shift, as new clients are expected to demand aligned advice, more transparency, and a seamless digital experience.

Endowus chief executive Gregory Van said: “We are here to advance the human wealth experience through technology, bringing the right level of personalisation and automation to make expert investing better for all of us. This mission transcends online and offline, and touches everyone, from those at the beginning of their wealth journey to the ultra-wealthy.’‘

Founded in 2017, Endowus has raised a total of S$67 million in funding from investors such as UBS, EDBI, and Singtel Innov8, as well as global leading venture capital firms Lightspeed Venture Partners and SoftBank Ventures Asia.