Recently formed multi-family office Carret Private Investments has acquired Hong Kong-based QL Asset Management and is eyeing more such deals, amid a regional trend of wealth industry consolidation.
Carret Private, a joint venture between US wealth manager Carret Asset Management and Asia partners, is looking to expand into Singapore and build scale quickly in the region.
Kenneth Ho, Asia managing partner at Carret Private, told AsianInvestor he was in talks with more asset and wealth managers and financial technology firms.
QL was founded in 2014 by former Julius Baer executives led by managing partner Kim Young-Jeong. It provides discretionary and advisory investment management to private clients and institutions and manages a macro fund that targets absolute return.
Kim and Ho were former colleagues at Julius Baer, where Ho was Asia-Pacific head of investment solutions before setting up Carret’s Asia franchise, as first reported by AsianInvestor.
Kim will lead the day-to-day operations of the merged entity in Hong Kong, while Ho will continue to oversee the holding company. The merged entity will have 15 people, but Ho said he is still looking to hire senior wealth managers to help grow its AUM. His target is to raise $1 billion from the region by the end of the year.
A key reason for acquiring QL was its hedge fund management capabilities, which would be useful for attracting AUM in the region, particularly from Chinese high-net-worth investors, said Ho.
Carret Private is seeing particularly strong appetite from mainland Chinese investors to invest in North America. “Hence we are building our alternative investment capabilities to cater to Chinese investors, and that’s why the skill set of QL Asset Management is extremely helpful,” he noted.
Carret Private also has other alternative investment capabilities; its three-member investment team helps clients invest in club deals, private equity, hedge funds and real estate.
Ho recognises the importance of reaching critical mass in terms of size, as Asia’s wealth management industry is on a consolidation trend, amid rising cost and regulatory pressures, narrowing margins and growing competition. This is pushing industry participants both to seek scale and review their business models.
This is true of smaller boutiques and big players. Witness New Silkroutes Group acquiring 51% of multi-family office Stamford Management, Julius Baer buying a stake in China’s Jupai Holdings, and the recent EFG-BSI and Bank of Singapore-Barclays mergers.
That said, some wealth management firms, such as Geneva-based Lombard Odier, see local partnerships are preferable to acquisitions in Asia. Likewise, Credit Suisse is looking to take this route in China.