Swiss firm Lombard Odier Darier Hentsch has been strengthening its investment, sales and client servicing teams in Asia over the past 18 months, and is now turning its efforts to the operational side.
The private banking and asset management group has just hired its first chief operating officer (COO) and chief risk officer (CRO) for the region, and more additions in those areas are planned. It has filled the two Hong Kong-based posts, but declines to name the appointees, because they will not start until mid-August.
The growing number of front-office staff is one driver of back- and middle-office expansion – another is the rising tide of tighter regulation of financ.
“The cost of compliance will increase because of forthcoming rule changes,” says Vincent Duhamel, Asia-Pacific head of Lombard Odier. “We’re adding staff on that front to ensure we are completely aligned with the requirements of all the markets we operate in.”
In terms of front-office personnel, among the most recent hires are relationship managers for the private bank. Peter Yang came in last month to focus on Chinese and Indonesian high-net-worth individuals and Jasrin Singh arrived in May to cover the non-resident Indian segment.
Yang was previously a senior RM with the Greater China team at Credit Suisse in Singapore, while Singh was director of her own company, SPIM Services (Singapore Property Investment and Management). They both report to Vincent Magnenat, who joined as Singapore CEO in December from Société Générale.
On the investment side, several executives moved to Lombard Odier late last year from firms such as US hedge fund SAC Capital Advisors, which is under investigation for alleged insider trading.
They include Cao Bingchao, who joined in October as a senior portfolio manager, having previously been a senior analyst for Asian equities at SAC. He also previously worked at Citadel Investment Group. And Chen Zhikai moved to Lombard Odier in New York in December as a senior portfolio manager, having previously worked at Partner Fund Management in Hong Kong as a senior analyst.
Lombard Odier's regional investment buildout started in earnest with the hire of Pranay Gupta as Asia chief investment officer at the start of last year. He was formerly Asia-Pacific CIO at ING Investment Management.
On the distribution side, under a partnership Lombard Odier signed with Seoul-based Kookmin Bank in December, the Swiss firm is finalising the registration of funds in Korea – they are due to be ready for sale this month.
Lombard Odier hosted training sessions for some 25 private bankers from Kookmin in June, covering how the Swiss firm's products work and fit into a portfolio. “We think this is the right formula,” says Duhamel. “We don’t profess to know how to sell better to Korean clients better than they do.”
Meanwhile, the Swiss firm has not yet agreed a distribution tie-up in China, which it has mooted in the past. “We haven’t decided how we want to do it or who to do it with,” says Duhamel. “It’s a bit of a complicated case, partly because of the [fast-changing] regulatory environment.
"There are a lot of interesting potential partners," he adds, "but a lot of the [Chinese] banks don’t know what they need yet."
As for investing in Chinese assets, Lombard Odier doesn’t have a qualified foreign institutional investor (QFII) licence, as it finds it sufficient to borrow quota when it needs it at present, says Duhamel. But since it is becoming much easier to obtain QFII licences, the firm will look at obtaining one as its need to invest in the mainland grows.
Meanwhile, Lombard Odier had been considering setting up a Hong Kong booking centre for client assets, but has decided to push the move back by at least two years. The main issue, says Duhamel, is that global regulatory changes are moving so quickly.
“It’s not clear to me what the advantages are of having booking centres in both Hong Kong and Singapore,” he adds. Having one in the Asian timezone is necessary, but he feels one in Singapore is sufficient for the time being.