Chinese wealth manager Noah Holdings is moving to boost its international investment capabilities by hiring more professionals in Hong Kong and, eventually, placing teams in the UK and US, to better service rising demand for foreign assets among wealthy mainlanders.
The firm also plans those in operational due diligence, compliance and risk management. The aim is to grow from 86 professionals to 130 next year, said Kenny Lam, Shanghai-based president at Noah Holdings.
Subsequently Noah intends to reduce the number of international third-party managers it works with from 25 to between 10 and 15, but to have a deeper relationship with them. The firm plans to cut down its current range of 40 funds, with selection driven by a house view now that it has a chief investment officer.
In November, Noah hired William Ma from Gottex Pengjin Asset Management as its first Hong Kong-based CIO, as first reported by AsianInvestor.
Noah only currently has an offshore presence in Hong Kong, but intends to expand that, potentially to London and the US west coast, within the next three years. The motive for doing so is to be closer to its underlying investments, rather than strengthening its sales channels.
Clearly the firm expects to remain largely focused on domestic mainland clients; not surprising perhaps, given the potential size and growth of that market. Morevoer, Noah’s focus will remain on fund-of-fund strategies, with a limited amount of co-investments.
While it is is looking to fund work with fewer fund houses, Noah is seeking more partnerships with insurance companies and family offices. It also wants to deepen its relationships with some insurers, Lam noted.
“Clients not only want investment products – they are now looking into insurance as part of estate planning or for education purposes,” he added.
Lam said demand for family office and discretionary investment services was also on the rise in China, especially as a growing number of clients are thinking about succession planning.
“Chinese HNWIs were previously very product-focused, but now they would give you a lump sum to invest on their behalf,” he noted. To service these clients necessitates having investment capabilities plus other resources, such as in tax planning, immigration and real estate purchase, among others.
Lam said Noah will learn from its partners’ expertise, which will help it build its global capabilities. The firms’ international partners include Swiss private bank UBP for global research and US quantitative fund manager McKinley Capital.
Noah manages $12 billion in assets globally, of which the Hong Kong operation manages about $2 billion in assets, and it expects the latter business to grow faster.