page 1
page 2
page 3
page 4
page 5
page 6
page 7
page 8
page 9
page 10
page 11
page 12
page 13
page 14
page 15
page 16
page 17
page 18
page 19
page 20
page 21
page 22
page 23
page 24
page 25
page 26
page 27
page 28
page 29
page 30
page 31
page 32
page 33
page 34
page 35
page 36
page 37
page 38
page 39
page 40
page 41
page 42
page 43
page 44
page 45
page 46
page 47
page 48
page 49
page 50
page 51
page 52
page 53
page 54
page 55
page 56
page 57
page 58
page 59
page 60
page 61
page 62
page 63
page 64
page 65
page 66
page 67
page 68
page 69
page 70
page 71
page 72
page 73
page 74
page 75
page 76
page 77
page 78
page 79
page 80
page 81
page 82
page 83
page 84
page 85
page 86
page 87
page 88
page 89
page 90
page 91
page 92
page 93
page 94
page 95
page 96
page 97
page 98
page 99
page 100
page 101
page 102
page 103
page 104
page 105
page 106
page 107
page 108
page 109
page 110
page 111
page 112
page 113
page 114
page 115
page 116
page 117
page 118
page 119
page 120
page 121
page 122
page 123
page 124
page 125
page 126
page 127
page 128
page 129
page 130
page 131
page 132
page 133
page 134
page 135
page 136
page 137
page 138
page 139
page 140

The Bahamas Investor29Over recent years,many members of theworld's wealth management community have beensetting their sights on Asia as a growing number ofhigh-net-worth individuals (HNWIs) across the Asia-Pacific (A-Pac) region look to expand their portfolios.As investors in the west have been plunged into aperiod of wealth preservation rather than wealthaccumulation, in the Asia-Pacific region, the newlywealthy are enjoying an economic boom that isswelling their coffers. The global HNWI population remains highlyconcentrated in the US, Japan and Germany, whichtogether accounted for 53 per cent of the world'sHNWIs in 2010, according to the 15th annualWorld Wealth Report,released in June last year byMerrill Lynch Global Wealth Management andconsulting, technology and outsourcing giantCapgemini. However, the Asia-Pacific area postedthe strongest regional rate of HNWI populationgrowth in 2010 among the top three markets.While HNWI wealth had already overtaken Europein 2009, Asia-Pacific has now surpassed Europe interms of HNWI population, expanding 9.7 per centto 3.3 million, while Europe grew 6.3 per cent to3.1 million (see Figure 1). Asia-Pacific HNWIs' wealth gained 12.1 per centto $10.8 trillion in 2010 (see Figure 2), exceedingEurope's HNWI wealth of $10.2 trillion, where thewealth increase was 7.2 per cent in 2010. Asia-Pacific is now the second largest region for bothHNWI wealth and population, second only toNorth America."While over half of the global HNWI populationstill resides in the top three countries, theconcentration of HNWIs is fragmenting verygradually over time," says Karthikeyan Rajendran,sales director, Middle East, global financial servicesat Capgemini. "The concentration of HNWIsamong these areas will continue to erode if theHNWI populations of emerging and developingmarkets continue to grow faster than those ofdeveloped markets."The fifth annual Asia-Pacific Wealth Report 2010,also produced by Merrill Lynch and Capgemini,noted that ultra-HNWIs, or individuals withinvestable assets of at least $30 million, rose 36.7per cent to 19,600 in the region, while ultra-HNWIwealth jumped 42.6 per cent in 2009.A-Pac potentialThese statistics present a very attractive opportunityfor asset managers. The A-Pac region consists of 12core markets: Australia, China, Hong Kong, India,Indonesia, Japan, Malaysia, New Zealand,Singapore, South Korea, Taiwan and Thailand.These markets together account for 95 per cent ofthe region's gross domestic product (see Figure 3).Leading the foray into the region are the big Swissinvestment banks such as UBS and Credit Suisse,which have been beefing up operations across Asia.Credit Suisse hired 60 new relationship managers inAsia in 2010, while UBS now has a regionalfootprint in eight different cities in the regionincluding Auckland, Hong Kong, Shanghai, Sydneyand Tokyo. Smaller boutique private banks such asAsia-Pacific region presents challenges for The Bahamas, but the rewards could be greatBy Steve CotterillWinning marketshare in A-Pac"Succeeding in the region reallyinvolves making the right contacts;finding a partner in the economy."WEALTH MANAGEMENT©ISTOCK/ROBERT CHURCHILL

30The Bahamas InvestorPictet are targeting ultra-HNWdiscretionary clients, bolstering Asianinvestments, with equities underpinningthe portfolio mix.However, the Swiss are not the onlyones eyeing the rapidly expanding Asianmarket. Canada's Scotiabank is alsopursuing a strategy of thoroughreconnaissance in the region. "It is an extremely diverse region;these countries are hugely different,"says Warren Jestin, Scotiabank's chiefeconomist. "The only central factor isthat people are getting richer. New moneyis looking for portfolio diversificationoutside of their economies."This may be the case, but thereremain significant barriers to managingthat wealth for providers outside of the region."Succeeding in the region reallyinvolves making the right contacts andfinding a partner in the economy,"continues Jestin. "Firstly, you have todo an assessment as to whether it isworth marketing there and then buildon that relationship. Scotiabank is inmore than 50 countries around theworld and every time we have gone intoa country it has involved finding apartner in that market and expandingwith them over time."A-Pac investor strategiesOnce you have decided which countrieswithin the region offer the mostpotential, you then have to decide whatproduct or service would be mosteffective. Asia-Pacific HNWI investorsended 2009 with 27 per cent of theirassets in equities and 26 per cent in realestate, both up from the previous yearwhere crisis-driven flight increased theallocation to cash-based instruments.HNWIs in Asia-Pacific remainedprimarily invested in their home regionsin 2009, though the proportioninvested outside the region rose to 36per cent up from 33 per cent theprevious year.Wealthy individuals in the region,excluding Japan, also continued topursue returns in real estate, whichaccounted for 31 per cent of theirFigure 1: HNWI Population, 2007-2010 (by region)Annual growth 2009-2010 8.3%Note: Chart numbers and quoted percentages may not add up due to roundingSource: Capgemini Lorenz curve analysis, 2011Number of HNWIs worldwide (in millions)20072008200920103.310. Change totalHNWI population2009-2010Africa 11.1%Middle East10.4%Latin America6.2%Europe 6.3%Asia-Pacific 9.7%North America8.6%8.610.0Figure 2: HNWI Wealth Distribution, 2007-2010 (by region)Annual growth 2009-2010 9.7%Note: Chart numbers and quoted percentages may not add up due to roundingSource: Capgemini Lorenz curve analysis, 2011Global HNWI Wealth (in US$ trillions)200720082009201010.840.742. Change totalHNWI wealth2009-2010Africa 13.6%Middle East12.5%Latin America9.2%Europe 7.2%Asia-Pacific 12.1%North America9.1%32.839.0WEALTH MANAGEMENT