Coutts International is in the market for multi-asset solutions in a bid to meet increasing demand for the products from its Asia clients.
The international private bank is in particular looking for an income-focused multi-asset solution or an Asia-focused multi-asset solution.
It comes several months after Royal Bank of Scotland agreed to sell the international private banking arm to Swiss bank UBP.
Singapore-based Aman Dhingra, Coutts’ Asia head of fund solutions, told AsianInvestor: “Multi-asset has been reasonably successful on our platform. We are looking at the market and where we see value we will add more.”
The private bank presently provides UK and global multi-asset investment options that are managed in-house. It also carries three externally-managed multi-asset funds. Coutts declined to name the managers.
“Our in-house funds are meant to provide clients with access and insight to our house view and asset allocation model. In that sense, they complement our portfolio management services offerings,” said Dhingra.
The three external funds are varied, comprising a traditional long-only multi-asset, a discretionary macro fund, and a specialist fund focused on the global banking sector.
Dhingra said Coutts has been offering multi-asset products for a number of years: “They’ve done reasonably well in the last 2-3 years and have consistently met or exceeded their target returns with high Sharpe ratios.
“There is a continuing pickup and there’s more demand for more solutions. Incrementally, we may look for an income-focused multi-asset solution or an Asia-focused multi-asset solution.”
Clients who take up multi-asset solutions are often those who are not inclined to invest via mandates or do not meet the minimum investment criteria to do so. They usually use multi-asset funds as their investment to generate steady returns for the long term; and use thematic funds as their satellite investment to generate alpha.
Coutts has about 100 active funds, including around 10 liquid alternative funds, and 130 passive funds, managed by some 40 fund managers on its funds platform. It added an exchange-traded fund last month which gives its clients access to US-listed master limited partnerships.
“This was an interesting income-generating opportunity highlighted by our investment strategy team,” said Dhingra of the newly-onboarded ETF fund. He declined to name the manager of the fund.
As of the end of March 2015, Coutts had £29.2 billion ($44.4 billion) in assets under management globally, but it doesn’t breakdown the AUM from Asia.
In late March RBS agreed to sell Coutts’ international business to Swiss private bank Union Bancaire Privee (UBP). The transfer of ownership and integration of Coutts International into UBP is still in process and is expected to continue over the coming months. UBP will announce a new integration strategy this month.
Eric Morin, who UBP appointed in May as Asia head, will lead the integration of Coutts' international business with UBP.
Morin’s appointment followed the decision of Coutts’ Asia head Alexander Classen to step down.
The sale of Coutts to UBP will boost the latter’s AUM by SFr30 billion ($31.8 billion). UBP had SFr98.7 billion in AUM at the end of 2014 versus a peak of SFr135 billion in 2007.