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Sustainable IAM makes for innovative intermediary services in Asia

Sylvain Gysler

VP Bank

Whilst some banks in the region have closed or downsized their IAM desks or sold their wealth management units, VP Bank Singapore is proudly strengthening its footprint in Asia. Founded in 1956 by Guido Ferger, one of the most successful trustees in Liechtenstein, it has IAM DNA at its core. Sylvain Gysler, Head of Intermediaries, and Christian Christow, Head of Business Development, tell us how its strategy targeting sustainable asset management services for intermediaries is translating into growth in market share.

VP Bank is well-positioned as one of the largest dedicated IAM teams in Singapore, having grown significantly in 2017. With 12 senior specialists—each with more than ten years’ experience–and five senior investment advisors, the “boutique” bank offers intermediaries a range of flexible and transparent options for innovative, tailored solutions.

“Intermediaries can expect efficient, reliable, cost-effective and intuitively conceived banking services, supported by state-of-the-art e-banking tools and data connectivity in a digital environment,” says Christow.

With its five international booking centres, VP Bank is one of the few banks of its size to have this expertise and unusually broad global presence. 

The service includes direct market access to the trading rooms in Singapore and Vaduz for active trading clients and direct broker arrangements for sophisticated intermediaries.

 

Capitalising on opportunities 

There is significant upside potential for the IAM business, says Gysler. The Asian IAM market is still under-penetrated and the creation of wealth in the region—as well as the transfer of wealth to the second generation by entrepreneurs and family business owners—makes this ripe for opportunity. As the industry gains traction, more senior bankers are exploring opportunities outside the bank environment, either setting up their own IAM company or joining an existing incubator platform. 

Indeed, VP Bank offers IAM start-up support at the early stages of discussion through the IAM ecosystem network. A well-executed value proposition, it offers unique services with a high level of flexibility, translating into exciting opportunities in the region. 

Christow comments, “The most important driver for the development of the independent asset management industry remains an efficient and transparent regulatory environment, which gains trust, educates the market participants and gives the necessary framework for promoting this influential new industry in Asia.” 

“The market has seen a growth in sophistication in recent years, and the IAM business model has gained popularity and trust by convincing clients who believe in the added value of independent advice,” he says.

The VP Bank intermediaries team is not only focusing on IAM—which it sees as being too limited in the region—but a broader range of service providers such as single-family offices, lawyers, trustees and fund managers. This means the bank can better meet client needs.

 

Holistic ecosystem

With an increasing number of new IAM start-up companies, especially in the North Asian market, there is a real need for holistic services offering additional early-stage support in the setup and orientation phase. 

VP Bank offers support for these new start-ups by giving access to a network of different service providers. The network of the intermediaries team and their experience in the Asian market contributes to the successful support of the IAMs’ franchise.

 Well-established IAMs with a sound track record in the market are looking to grow their franchise further. Whether this is achieved by hiring new bankers or expanding their offering to new markets, VP Bank provides support by connecting people with the same interests. Having a deep understanding of the IAM markets in Asia has resulted in VP Bank becoming a trusted partner when it comes to expanding franchises into new regions. 

Christow says, “In the fast-changing regulatory environment it is crucial for the IAM to understand the changes and impacts on their business. VP Bank Singapore follows the impacts on the IAM industry closely. Our network within the IAM ecosystem also includes access to third-party service providers.”

 For more complex queries such as different fund setup options for family funds, VP Bank supports the IAM in a direct discussion with their end-clients. 

 

Accessing unique investments

Amongst its many innovative solutions, the bank offers exclusive private debt deals for its clients. “In 2017, the firm started co-operations as partnerships in the non-traditional investment space, developing a focus primarily in private markets—debt, equity, real estate, infrastructure—and other illiquid strategies in the hedge fund space,” comments Gysler. 

“We have developed the tools to book and distribute corresponding investments to make it feasible for our client base to invest.” The firm offers selected private debt programmes at favourable terms and entry sizes by giving investors, who do not command ticket sizes above USD5m, access to specific strategies.

Additionally, VP Bank’s involvement increases investor protection through the due diligence performed on—and the selection of—the managers. When investing in private debt markets, the bank considers two high-level criteria to be of specific importance: the competitive landscape and the structural developments in the marketplace.

 Christow comments, “To cater for the competitive landscape, we selected managers who can provide [smaller] credits (up to €30 million). This implies more work measured by the expected return per deal, and therefore there is less competition and more negotiation power in this segment.” 

VP Bank is convinced that the structural gap between banks providing credits and the demand from the industry is more significant in Europe compared to the US. Therefore, the bank has selected managers focusing on corporate debt in Europe, with the ability to invest in this private debt market through a fund structure. 

 

Creating choice

Besides the dedicated IAM services such as brokerage, custody and investment advisory solutions the bank also provides intermediaries with specific, tailored solutions such as the custody of family funds. Other flexible initiatives include Universal Life Insurance premium financing solutions, the trading of futures, single stock lending and Singapore mortgage financing solutions. 

Moreover, the bank offers access to state-of-the-art e-tools and has recently introduced ProLink in Singapore—an information platform which gives intermediaries access to markets and investment ideas as well as account opening forms for efficient client on-boarding. 

All of this highlights that there is a genuine need for more efficient financial intermediary services in Asia. And while many in the market are shying away from the industry, VP Bank is proving that opportunities abound for those who are willing to think innovatively. 

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