If you use the Swissness and the reputation that Switzerland has acquired in the private banking industry but also in terms of succession planning and family offices. I think this is a selling proposition that if you go out to other countries like in Asia, where people are just waking up to concepts like governance and I’ve been successful in making money but how do I make sure that money now passes on to the people I really care about? I think that’s really an opportunity for fiduciaries, trust companies, lawyers, asset managers to capitalise on when they go to Asia. On the reputation, the experience, where the clients are willing to pay for that and who are now in a position that they feel they need that. Now is really the right time.
The Swiss should focus on Switzerland and let the Asian banks and institutions cope with their own market where they have a huge opportunity. The most important thing is to realise where the market is. The market is in each country. The national market is the largest market and no foreign institution, whether it’s Swiss, or French, or German can have adequate access to a national market. Therefore, the Swiss are probably going to have a limited market access, whereas the national bank, who already have the clients, who already have the cost advantage, have a huge opportunity to occupy themselves with and not worry about the foreigners.
Swiss ICT Investor Club
When investing in Asia, I’m still fascinated how difficult it is. Even opening up a bank account in China is almost impossible, and to transfer money. I recently had an experience when I wanted to invest in a Chinese startup and they said, “Oh, you can’t do it.” I said “why I can’t do it?” They said, “because we lose all our government advantages.” They get literally hundred of thousands of dollars every year from the government to be a startup. This is kind of difficult for us and it was a funny story too.
My speech today will be about the inclusion of China A-shares into the global Emerging Market Index. This has been a question which was on top of the newspapers for the last four years. For four years, we have consulted with the global, mostly institutional investment community, whether we should or should not include domestic China A-shares into our global and internationally used equity index. After three years of saying no to that question, this year in June was the moment when we announced that we will actually include approximately 230 China A-shares into the Emerging Market Index next year.
Silk Road Finance
The concept of belt and road is important especially with the recent completion of the 19th Congress Meeting here in China. Yet it is a term and a concept that most people have heard but yet most people don’t understand. While it may not have a direct implication on investment, but if you think about it, with the mass of China and wealth, you want to know where are those wealth heading because it will rise a tide wherever it heads to. The belt and road is the only and the most important strategy that China is pushing. You want to know where are they headed so that you can either be with them or better still ahead of the curve. I think that’s why I think it will be valuable for audience to understand belt and road.
HP Wealth Management
It’s great to see, first of all, so many people in Zurich looking at Asia, looking at opportunities in Asia, and Switzerland has a great reputation. I think the brand Switzerland still counts for something in Asia. I think Asians love to come to Switzerland so the potential for working with Switzerland or for Swiss companies going to Asia, is tremendous. We have seen so many people here today in the room in Zurich, that’s a confirmation of that.
I guess for an Asia-based independent asset manager the opportunity is to manage Asian money for European investors. We manage Asian equity mandates for European investors, because I think the expertise is in Singapore rather than in Zurich, so that’s an angle, an opportunity for independent asset managers to tap into the European market as well.
Credit Suisse Asset Management
When people are thinking emerging markets, they put everything in the same box. They’re looking at, let’s say, the United States, Europe, but then all the rest is emerging market. Even in emerging markets, they definitely need to separate strongly. Is Asia still an emerging market?
That’s number one. Number two is actually, the moment you start investing into bonds, what is a bond? A bond is a stream of cash flow. What do I want to have? I want to have a company which is growing, earning money, ultimately being capable of repaying the debt into coupon and therefore, I want to know actually how much coupon, how much yield do I get per unit of duration.
For me, it is actually quite an interesting thing due to the fact that we have strong companies, properly financed in a growing area, and they pay actually a very nice yield.
We are running a volatility model. If you look back, how developed the correlation over time among the developed markets all over the world. I think you would see that volatility can be a good diversifier to the nation’s portfolio, especially because during the normal time, it’s quite well correlated, maybe at a rate of 0.5.
But when this strength is coming and all the markets goes back, it will be strongly negatively correlated. I think there is a risk premium, together quite some trend following model, you can extract quite uncorrelated returns from a volatility model.
Asia Plantation Capital
In fact, the question is in the opposite side. It is not a Swiss company which move to Asia but it is an Asian company which move to Europe. Why? Because Asia Plantation Capital, APC Europe wanted to make and discover to European people how they can make a sustainable investment and how they can serve the planet and how they can help local people, plus making profit at the same time.
Investing in India at the moment is providing some great opportunities. First of all, we’re seeing favourable demographics. We’re seeing some incredible reforms from the Modi led government who is controlling both Houses of Parliament. We’re also seeing a lot more maturity come through in the managers that we’re seeing in the market as well. Furthermore, the actual returns are coming through. The currency is providing a lot more stability. We’re seeing better foreign flows, better domestic flows. The future definitely looks bright for India.
Well, I think Switzerland still has a lot of opportunities. I think capitalising on the fact that it has the right private banking platform as well as the international fiduciary offering. When I talk to clients, normally they already having a relationship in Switzerland. They are interested in the fact that they can do international wealth management from here. They have a choice of booking centers, be it Zurich or Geneva. They’re also interested in fiduciary structures and the fact that you can get common law structures and civil law structures in Switzerland is very attractive.
I think it’s very interesting the blend between types of products and services and types of investment opportunity. Clearly, the succession planning and structuring, I think, has been high on people’s agenda. Then from the pure investment play, having people understand a little bit more about what’s under the bonnet when you talk about Asian investments. I think that’s a really good eye-opener for many people here I suspect.