Goldman Sachs’ private wealth management arm in Asia has made developed a strong recurring income base due in no small part a discretionary proposition which it proclaims to be akin to having a personal chef as opposed to its competitors' «set menu» offerings, in a conversation with finews.asia.

In Asia, Goldman Sachs’ wealth management business targets the ultra-wealthy and its discretionary portfolio management (DPM) proposition reflects this segment focus by showcasing its ability to cater to its clients’ diverse and complex needs through customization. 

The private bank places a strong emphasis on asset allocation by building a bespoke strategy based on client needs from scratch – a stark contrast from many competitors that tend to have broadly predetermined asset allocation strategies based on general questions about risk profiling. 

«It’s like offering a personal chef experience instead of set menus,» said Jacky Tang, head of portfolio management group and portfolio advisory group, Asia, at Goldman Sachs Private Wealth Management, in a conversation with finews.asia.  

Bird’s Eye View

Private banks are increasingly attempting to obtain a complete view of clients' overall portfolio not only to gain insights about competitor activity but also to advise clients on a more holistic basis, especially given the strong multi-banking tendencies in Asia. 

«What distinguishes us is that we have the resources to make sense of the data on client portfolios,» Tang said with regards to translating data into useful information to assess broader asset allocation and risk exposure. «We have a global team of over 20 people with backgrounds in quant or factor modeling who focus on using analytics in strategic asset allocation.» 

Something for Everyone

According to Tang, DPM demand picked up after 2008 as investors grew more wary about managing volatility and other risks in their portfolios. In Asia, the bank recently posted a 25 percent year-on-year growth in DPM assets, excluding performance. But despite its success, it is cognisant that DPM may not be the right fit for all clients but notes that its disciplined and holistic approach can generate other deliverables. 

«Even for client relationships which are brokerage-driven, we can still take a holistic view by evaluating, for example, the size of a position in an asset class or its correlation to exposure in the overall portfolio,» Tang explained. «Our tailored approach enables us to maintain investment discipline while allowing flexibility to cater to clients’ needs.»