Swiss bank eyes Asia institutions, retail market

Banque Syz & Co is aiming to ramp up its penetration of institutional investors in Asia and is weighing up whether to register its product suite for retail sale in Hong Kong and Singapore.

Further, the $26 billion Swiss private bank and asset manager is looking to hire senior investment professionals in both equity and fixed income for its Asian office in Hong Kong.

Eric Syz, co-founder and managing director of the privately held family business, confirms that his eldest son, Marc, will be based in Hong Kong from January 1.

His role will be two-fold: to assist its regional five-strong institutional sales and business development team targeting asset owners in Hong Kong, Singapore, Korea, Australia and Japan.

He will also act as a liaison for wealthy private clients in Asia and serve as a link to the firm’s Geneva base. He will be reporting to Asia CEO Daniel Ghirardi, who joined the firm from Luxembourg-based multi-family office Massena Group with a growth mandate in 2010.

“We are very committed to Asia, we think it is a growing market,” Eric Syz tells AsianInvestor on a flying visit to Hong Kong. “But we know it is going to be a long-term journey.”

Banque Syz & Co was founded in 1996 as a private bank that takes an institutional approach to wealth and asset management. It established its Hong Kong base in 2007, and has an asset management licence.

On the private banking side it provides capital preservation to multi-generational clients in Europe and also delivers investment advice to entrepreneurs, in which it hopes to make a niche for itself in Asia.

Its asset management business also has two sides: managed accounts for asset owners including pension funds, sovereign wealth funds and insurance companies, and a mutual fund business.

Syz describes the bank’s strengths as Swiss and European fixed income, European equities, global equities and absolute return – areas it feels it can add value for Asian institutions.

Of its $26 billion, its asset management arm accounts for $14 billion, of which $5 billion is in 26 mutual funds. But it has just $800 million to $1 billion in Asia-sourced assets, or 6% to 7.5%.

Overall Syz & Co has 45 investment professionals with onshore booking centres in Geneva, Italy and Spain and offshore in the Bahamas.

It has two staff managing assets out of Hong Kong (mostly fund of hedge funds), so this is something Syz wants to expand (not least because demand for these products is low).

“If we can find good people we are going to hire,” he confirms. “For us to exploit our [asset management] licence here it would be good to find Asian specialists on both the equity and debt side who know the markets. But we have been looking for 18 months and not found anyone.”

He mentions Asian sovereign debt as a market with huge potential, suggesting investor demand will increase in line with the growth of the market as a long-term trend over the next 20 years.

But Syz says he is in no rush to hire and that he would rather provide a good-performing third-party solution than have a sub-standard offering in-house.

“We are not in a hurry to find people, but we are actively looking. I believe this market [Asia], particularly on the debt side, has to be treated locally. You cannot do Asian sovereign debt from Europe.”

The aim, eventually, will be to launch Asian product out of Asia, as well as providing stronger Asian input to its other investments. At present Syz & Co subcontracts its emerging market exposure to third-party provider Acadian Asset Management based in Boston. (Interestingly, Threadneedle announced yesterday it had just hired Acadian's head of EM debt, John Peta, to lead its emerging market debt team based in London. Details will be in Friday's job-hopper column.) 

The bank’s funds are available to professional investors in Hong Kong and Singapore. But Syz confirms it is thinking about registering them for retail sale in the two cities, both as a means to generate asset growth and a way to tap the region’s banks as a mass distribution channel.

“Banks use our products for discretionary asset management and not for retail sale in Asia,” he adds. “We will look at the size of the market and its growth potential over the next two months. Once we understand this we can make a decision on whether registering our products for retail sale will be worthwhile.”