Swiss boutique Rothschild Wealth Management has named Audrey Zau as head of North Asia, as it sees rising demand for discretionary portfolio management (DPM) among clients in the region.
Based in Hong Kong, she replaces Alois Mueller, a Swiss who is leaving the firm after some two years spent refining its Asia strategy. He chose to leave Rothschild and stay in the region rather than taking up another role in Switzerland. AsianInvestor could not ascertain his next destination.
Zau reports to Richard Martin, London-based chief operating officer of Rothschild’s wealth management and trust business. She was previously North Asia head of wealth management at BHI Investment Advisors, a subsidiary of Bank Hapoalim (Switzerland), the private bank arm of the Bank Hapoalim Group. She also spent 15 years as a senior director at HSBC.
Rothschild WM’s Hong Kong and Singapore teams – each around 10-strong – target clients in those two cities respectively. There’s plenty of business for the firm in those two markets alone at present, said Martin.
More than 10% of Rothschild WM’s €21.6 billion in assets under management is sourced from Asian clients, and that figure is growing fast, he noted. Some five years or so back it was a “negligible” fraction of the total.
Still, it is tough for smaller firms to compete with larger players with much deeper pockets in the Asia, as is clear from the struggles of certain players in recent years.
Rothschild’s strategy is to sell international, multi-asset discretionary portfolio strategies run out of Europe to ultra-high-net-worth individuals. It is not looking to compete with firms that trade local stock markets and provide leverage to regional clients, said Martin.
This kind of discretionary portfolio management is increasingly finding favour with very rich Asian clients, he noted. Whereas two or three years ago they may not have been interested, “they will have that conversation now”.
The bank’s approach relies on the fact the most of the costs of delivering its DPM services to Asian clients are already sunken in its European business. “With that sort of operating model we can afford to be patient for a long time,” said Martin. “We can leverage on the gradual pick-up in demand.”
Asked how he views the growing number of external asset managers (EAMs) and multi-family offices (MFOs) in Asia, Martin said Rothschild is not interested in having EAMs booking over its platform, because it wants direct relationships with its clients.
Meanwhile, he sees MFOs as potential customers rather than competition – if Rothschild can provide what they want. The firm largely offers aggregated, multi-asset class strategies, but often MFOs want an individual component, such as a bond or hedge fund strategy, to include in their overall portfolio, said Martin.
As a result, he noted, “our sweet spot is typically up to $100 million in bankable assets, rather than $500 million or above, because that’s typically the MFO space”.