This publication recently interviewed Anuj Khanna, head of the south Asia wealth management business for Pictet & Cie, having previously worked at Credit Suisse. Swiss banks have made a serious tilt at Asia’s market for high net worth clients.

This
publication recently interviewed Anuj Khanna, head of the south Asia wealth management business for Pictet & Cie,
having previously worked at Credit Suisse. Swiss banks have made a serious tilt
at Asia’s market for high net worth clients.
How well is Pictet doing and what is its strategy?

In the broadest terms,
where do you see Pictet’s position in the South Asia
wealth management market at the moment and for the next few years? How do you
want the business to develop, and why?

Pictet’s positioning in Asia
is as one of the largest independent asset managers and the largest
multi-family offices in the world. Globally we are the 10^th largest
private bank in the world (source: Scorpio Partnership) with total assets of $400 billion across Pictet
Asset Management (PAM) and Pictet Wealth Management (PWM). PWM Asia is
approximately 10 per cent of global private wealth management.

We are not looking for growth for growths
sake, but to grow at a pace that makes sense for us and our clients. We are not
in it for the size. We are a boutique, not because we are small but because we
are focused. We are already large enough to be a global player, but not too
large to manage. This is part of our appeal to clients and employees.

What kind of strategy are
you employing to develop the business? What sort of markets are you
particularly interested in, and what are you more wary of, and why?

We are among the world’s largest
independent asset managers. We are owner-managed and therefore independent; we
have a global network and an AA- rating. This gives us the size and
capabilities to be a partner for cash-rich clients.

Our strategy is to offer our focused
multi-family office and independent asset manager ability to cash-rich clients
across the region.

We also offer senior bankers an
alternative. Senior bankers in the region working at the large banks are asking
themselves what is the way forward for them and their clients. Working at
Pictet is an alternative to staying at a large bank or going solo.

Private banking in Asia
is at an inflection point for two reasons: there has been an erosion of trust
among the largest cash-rich clients with the large banks and they are sensitive
to conflicts of interest among those who they entrust with their wealth.

At the same time senior bankers, who’ve
been working in the industry for upwards of 20 years, don’t want to be managed
as part of a large group. Private banking has really developed over the last
20-30 years in Asia so now many bankers are
reaching a cross-road on how they want to spend the final 10 or so years of
their careers.

Pictet offers them a unique position to
serve their clients effectively using one of the best investment platforms
available. They also benefit from an environment that takes a long-term view,
which can only be derived from our management structure.

The Pictet multi-family office platform
offers clients with liquid wealth of $100-500 million a way of managing their
assets with their preferred bankers as an alternative to creating their own
individual family office, which has its challenges in terms of expense, finding
talent and establishing investment capabilities.

How many people are
employed in your part of the firm? Are there plans to change the number and if
so, can you give me some sort of idea in terms of numbers?

We have approximately 20 relationship
managers in each location in Hong Kong and Singapore. As we continue to grow
we will look to hire further senior bankers who match with our strategy and
approach.

Are there recent specific
additions to the team you would like to highlight and mention in terms of
importance?

I took over the South Asia business in
2012, relocating from Hong Kong to Singapore,
but I had been in Singapore
12 years previously. Over the last year and a half we have had a lot of success
hiring a number of high quality people, starting with a team from Credit Suisse
covering Greater China from Singapore,
with An Hui Ling as the team head. We also hired another team from BSI (also
ex. Credit Suisse) covering Mainland China under Tse Meng Ng, starting
on January 1^st 2013. More recently we have made several senior hires
each with 25-30 years’ experience, such as Kia Seng Chew (ex. Merrill Lynch and
Credit Agricole) and Esther Loh (ex. Merrill Lynch), both stalwarts of South
Asian markets.

Where do you mainly source
new managers from? Has this changed recently, with more focus on in-house development
vs external recruits? What is your approach to talent management and how you
work with external recruiters, etc?

Senior bankers looking for alternatives are
driving our recruitment. Our strategy for Asia is to create a senior bankers
club here, with Hong Kong and Singapore
working together. We are looking for people with 20+ years’ experience seeking
an alternative home for themselves and their clients as a consequence of both
groups questioning the large integrated bank model and its potential for
conflicts of interest.

How does your firm relate
to the Pictet operation back in Switzerland?
How much autonomy are you given?

We have been present in Singapore for
over 20 years with a merchant banking licence and booking centre for over 10
years. Over the past four years we have really ramped up to build a strong
Asian investment platform with a team of local investment specialists,
including an Asian CIO, head of active advisory, and head of portfolio
management. We have also built up a strong investment and market trading
platform to serve clients in the region.

To accomplish this Pictet recruited a
highly experienced Asia management team in the form of Claude Haberer (CEO of
Wealth Management, Asia), Sharon Chou (CEO of Wealth Management, North Asia) and
myself as CEO of Wealth Management for South Asia.
The intent was to establish an Asia-based business to serve cash-rich clients
in Asia.

We have substantial autonomy to build out
this business, which is why we hired Asia
management, in line with Pictet’s philosophy and principles.

Given some of the issues
facing Swiss banking at the moment, does the “Swiss” provenance of Pictet work
as a plus for you in Asia?

Absolutely. Globally, the Pictet business
model is one of being an independent wealth manager for cash-rich clients. We
have been dedicated to this for 200 years, and this coupled with our
owner-managed structure, long-term view and independent thinking for our
clients is what differentiates us from everyone else.

This provenance gives us a conservative
view with the aim of protecting client assets and beating inflation, not
chasing returns at any cost. This is appreciated by our Asian clients.

How do you see the Pictet
“brand” evolving? What sort of steps do you take to spread it, raise awareness?
Is your acquisition of new clients mainly a word-of-mouth affair, or are there
other channels?

Already in the last two years as Pictet has
developed rapidly, a lot of senior bankers are reaching out directly or via
search firms, asking more about working for Pictet. We can afford to hire the
best and brightest because of our scale.

We can see that the level of knowledge and
acceptance of Pictet among senior bankers in the region has increased greatly,
and through them and word of mouth the same can be said of their cash-rich
clients. The knowledge about us in Asia has
continued to improve faster than we’d expected.

We have also continued to develop the
business, such as acquiring a full banking license in Hong
Kong in 2012 following our presence there for over 25 years.

In the immediate aftermath
of the 2008 financial crisis, Pictet told me it was getting a good deal of inflows
from disgruntled clients at larger firms, including Swiss ones. Is this still
happening, or has it stopped? Is most of the new wealth being booked wealth
that has not been banked elsewhere before?

Yes it is true that Pictet has always been
a ‘flight to quality’ destination in times of crisis. This is because we do not
have any risk on our balance sheet due to a lack of investment and corporate
lending, which is reflected in our high AA- rating.

In Asia at
the moment new assets are often derived from the inflection point, with bankers
and their clients drawn to Pictet due to the erosion of trust with integrated
banks.

Are there specific groups
of offshore, expat clients that show interesting growth trends in your area
(non-resident Indians, Indonesians, etc.)?

The groups of clients who have shown
interest in us are UHNWI cash-rich clients who truly need private banking to
manage their assets in the long-term, in a conservative way, using an
institutional approach to management of assets – that is, our multi-family
office platform.

We also offer the Pictet investment office,
a global network with large equity houses that can offer investment
opportunities in the alternative space, such as commodities, hedge funds and
the like.

Over the last few years, we have seen the
number of clients who are very cash-rich (in excess of $50-100 million or more
in liquid assets) has risen substantially, either due to clients selling off
businesses or Asian entrepreneurs reaching a stage where they take money out of
the business to create a financial pool of reserves. These clients are driving
demand for our services across the region, whether in Singapore, Indonesia or elsewhere.  We also see many clients relocating
themselves and/or their family offices to Singapore, from all parts of the
world. This is having a further positive impact on our business here.

Does the management
structure of Pictet have an appeal in your region? Is it a business model they
need to learn about or is it something they understand?

Our management structure has an appeal to
senior bankers and their cash-rich clients thanks to the long-term, independent
and sometimes contrarian viewpoint it enables us to take. As we have built our
presence in the region the awareness of this has continued to increase.

Our ability to offer an institutional
approach while being large enough to offer a good network, but small enough to
offer attention and service has universal appeal.