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Hong Kong Tatler - - | Tatler Focus Citi Private Bank -

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.”

tai­lored so­lu­tions

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