While many rival private banks have taken advantage of talent outflows from the now-defunct Credit Suisse, Pictet is comparatively «reluctant to hire big teams», its Asia wealth CEO Victor Aerni told finews.asia.
Numerous private banks have taken advantage of the UBS takeover of Credit Suisse by hiring talent that has exited the latter, including in Asia. According to Victor Aerni, CEO of Pictet Wealth Management Asia, the Swiss bank has also made similar moves in the region but to a lesser extent.
«As a result of some of the industry consolidation in the past year, we have hired selectively not just for relationship management but also on the investment side,» Aerni said in an interview with finews.asia. «But we are reluctant to hire big teams.»
Cultural Factors
Beyond reluctance to acquire big teams, Pictet is also not in the business of acquiring companies. This starkly contrasts with the growing consolidation amongst its Swiss rivals including, most recently, the reported possibility between Julius Baer and EFG.
«Pictet has never done an acquisition in our history as we believe in building our distinctive culture organically,» Aerni explained. «We have reached the ninth generation of the Pictet family as managing partners with a very special independent partnership model that drives our long-term perspective. The principles of succession and transmission of ownership have remained unchanged since Pictet’s foundation in 1805.»
Regional Growth
Nonetheless, the bank continues to post growth. Within Asia, it has increased the number of relationship managers by 40 percent in the past few years. It also recorded about 8-9 percent in net new money in 2023 compared to assets under management (AUM) in the previous year. Pictet does not disclose regional breakdown but is Switzerland's second-largest financial institution with over $700 billion in AUM globally.
«So far, for the first four months in 2024, we also have good momentum in net new money,» Aerni added.
Singapore: AUM Leader
Alongside private assets, Asia is one of Pictet’s top two strategic thrusts centered around the twin hubs in Singapore and Hong Kong. According to Aerni, the bank has seen more business in recent times done out of Singapore which mainly focuses on the local market, Thailand and Indonesia.
In fact, the city-state accounts for 60 percent of AUM in Asia compared to 40 percent in Hong Kong.
Hong Kong: Capital Markets Center
However, Hong Kong continues to be a growth driver and a «key pillar» of Pictet’s strategy. The bank focuses on clients from Hong Kong, Taiwan and mainland China through the North Asia hub, most notably large wealth owners in Beijing, Shanghai and the Greater Bay Area.
«In Hong Kong, you see a lot of established families and newly created wealth from mainland China,» said Aerni. «Singapore has made big efforts as a financial center but they don’t have a huge market at the doorstep like China. Hong Kong is still the capital markets center of Asia and the preferred location for IPOs.»
Onshore View
Currently, Pictet is focused on the offshore market with no plans to go onshore in Asia, though it has a strategic alliance with Bangkok Bank in Thailand to provide the latter with wealth management expertise. But Aerni did not fully rule out the possibility for the future, particularly in India which has seen numerous private banks rush in to take advantage of its phenomenal growth outlook.
«For India, the question is whether or not we go onshore one day because that’s where the music is playing. The wealth creation in India is impressive and they are catching up with other fast-growing markets like China,» he commented.
Asset Delegation
In terms of the business mix, Pictet has seen a growing delegation of investments in Asia, which has historically been known for its self-directed tendencies. It currently boasts over 50 percent asset penetration into mandates and funds in the region. This includes contributions from ultra-high-net-worth clients who have been increasingly seeking customized solutions.
«For large clients, we have seen traction in bespoke mandates with a minimum of $100 million via solutions provided by what we call the Pictet Investment Office (PIO). These are bespoke discretionary multi-asset mandates with high conviction investments across private equity and co-investments, core equities, credit opportunities and hedge funds,» Aerni said. «More than half of PIO new mandates last year were from Asian clients.»
