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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)20072008200920103.310.110.90.10.40.10.50.40.40.10.40.50.10.40.53.13.42.83.13.32.42.62.73.03.03.1121086420% 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)200720082009201010.840.742.71.21.01.71.70.81.41.01.510.211.69.510.76.25.86.77.311.77.48.39.19.79.510.750403020100% 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

aggregate portfolio at the end of 2010,up from 28 per cent a year earlier andfar above the 19 per cent global average.Money also flowed into the region,with investments in emerging marketsproviding opportunities for HNWIs insearch of profit. In the first 11 monthsof 2010, according to the MerrillLynch/Capgemini report, investorspoured record amounts into emergingmarket stock and bond funds beforeselling to capture profits as the yearended and after the value of manyemerging market investments toppedpre-crisis highs."In Asia, there is a myriad of serviceproviders available and people choosethem in a variety of ways," says JosephField, senior residential partner, Asia atWithers wealth advisors. "We tend towork with banks, but also with familyoffices and they are as diverse a group asyou see in North America. What isinteresting is that there is a bias towardcorporate investment, which havetended to fare far better in the recessionthan others, and the concept of'liquidity events' is almost unknown."Trends of this nature highlight theneed for a valued partner that is keenlyattuned to the nuances of the cultureand the market. The danger is that largeamounts of time, effort and resourcesmay be poured into strategies that arenever going to return on investment. Conversely, without the right advice,you could entirely overlook large areasof the market that have massiveuntapped potential. Field explains:"Estate planning, for example, is acomplex subject in Asia. Chineseculture has a fear of death and estateplanning is seen as tempting the fates.However, in the past few years, taxationand the size of estates has requiredpeople to give this much more seriousconsideration. Also, many of the Asiancountries have a civil law system andothers use Sharia for regulation offamily matters. It is important to payattention to detail."Jestin at Scotiabank agrees. "You haveto research and find a niche, becausethere are so many countries and they areso different that you could go bankruptmarketing to Asia following a broad-based strategy," he says. "You have tofind out where the affiliation is."The Bahamas positionSo, is it possible that The Bahamas cantap into this undeniablylarge, but equallycomplex market? Thereare a number of basicfactors such as timedifference, geographicdistance and languagebarriers that present fundamentalchallenges to doing business. There isalso keen competition fromjurisdictions that are both moreculturally and geographically alignedwith the region, namely Singapore andHong Kong.However, in principle there is noreason why a jurisdiction such as TheBahamas cannot carve itself a niche inthe market, particularly if providers setup local offices and start buildingcontacts. "The term 'offshore' has nostigma attached to it in Asia," explainsField. "Asians use offshore jurisdictionsa lot, primarily for companies. The term'BVI' [British Virgin Islands] is almostgeneric for an offshore company. ManyAsian tax systems are territorial and thereis little in the way of death duties. TheBVI, Jersey and the Cayman Islands arefrequent visitors and their corporate andThe Bahamas Investor31"You have to research and find aniche . you could go bankruptmarketing to Asia following abroad-based strategy."WEALTH MANAGEMENT