Jyrki Rauhio, head of investment finance and banking, Citi Private Bank Asia Pacific he market for private banking in Hong Kong has changed beyond all recognition during the past decade, with the growth in ultra-high-net-worth individuals in the city fuelling a corresponding growth in demand for a trusted wealth-management partner. But amid all the private banks rushing into the market, one bank stands out both for the duration and depth of its commitment to Hong Kong, and for its unbeatable global reach: Citi Private Bank.
“I think we have a little bit more substance,” says Jyrki Rauhio, head of investment finance and banking for Asia Pacific, Citi Private Bank. “There’s our platform, our ability to execute, our balance sheet and our ability to access managers and experts that are not available to smaller players. We’ve been established in Asia for 40 years, so we also have the ability to take the long view.”
The bank offers a broad range of asset finance solutions to its private banking clients, with expertise in specialist areas such as aircraft and art, both financing purchases of them and securing finance against them.
Citi Private Bank’s hands-on approach to investment extends as far, for example, as a trip with clients in November to meet tech entrepreneurs in California. “We go to the source,” says Rauhio. “We offer a lot more than a broker report.”
Overseas diversification is proving increasingly popular with clients, although Rauhio remains “a long-term China bull”, despite the economic slowdown. “We’re still talking about multiple per cent growth on an $11 trillion economy,” he says. “There are many complexities and intricacies when it comes to dealing with the China market and that is where our years of experience can benefit our clients.”
There are still investment opportunities in China, but they are more limited than in the past. “The Hang Seng Index and the Shenzhen Stock Exchange index have had lackluster performance, so clients are looking overseas, especially at real estate,” says Steven Lo, Citi Private Bank’s global market manager for Hong Kong.
The bank has been active recently in Singapore, India and Hong Kong, but Lo says there has also been increased interest in safehaven real-estate investments. “That means the US, Australia, New Zealand—and recently, with the drop in the value of the pound, there’s been a lot of interest in the UK. When the currency drops 15 per cent overnight, there’s clearly going to be interest.
“After Brexit we launched some UK real-estate investments, and as soon as they were offered clients started raising their hands. Clients think that London is a place they should be if they’re diversifying. Real-estate investors are all making trips to London at the moment, to try to gauge where the value is.”
A cosmopolitan, globalist attitude to investment increasingly characterises private banking clients in Hong Kong, where they are often second- or third-generation members of business-owning families. “That second generation can differentiate why we are better than some of our competition,” says Lo.
Rauhio adds that these people, raised in a very different environment from their entrepreneurial forebears, are driving a rise in the take-up of discretionary services, always more popular in times of economic uncertainty.
“The original entrepreneurs made their money through hard work and big bets,” he says. “Their kids and grandkids have all been to the best overseas universities, and they’re more risk-averse; their view of the world is so different. Discretionary services are particularly interesting to clients like that. It might not be a big mutual fund; it might be tailored, selected assets: the hospitality sector in Australia, say, or real estate in Manhattan, or distressed assets in Europe.”
The bank has fostered close relationships with this group of people—10 years ago it launched a next-generation programme, coaching families in succession planning and also providing second-generation members of wealthy families with networking opportunities. They tend to be proactive in coming to the bank with ideas, says Rauhio.
“Clients come in here with a specific purpose and at times a particular view. Because they know we have global coverage, they want to see if we have something that fits with their ideas. We bring the world to our clients in nice, bite-sized sections. We connect the dots.”