Strategy & Practice Management
A new angle to woo UHNW families
Swan Khing Go of Marc Faber Group
Feb 2, 2016
Khing Go's decision to join Marc Faber Group in late 2015 highlights the growing potential to give real advice to UHNW clients - something independent firms can take advantage of as compliance burdens and revenue targets continue to hamper many private banks.
From the diversity of deals, geographies and clients that Khing Go is busy working on, you wouldn’t think he has been in his new role, running the Singapore office of Marc Faber Group, for less than six months.
But the firm’s value proposition seems to be spot on for the firm’s target of UHNW individuals and families.
These clients have increasingly been looking to steer clear of the capital markets over the past 12 to 18 months or so, in favour of more tangible opportunities which are aligned with their own business and private interests, explains Go.
“We are looking at direct investments into commercial real estate, and investing into some primary businesses where clients participate,” he says.
In short, these types of deals tend to generate better returns in the long run, plus are more interesting to clients, especially where the businesses are related to those of the individual client. “They are more tangible; they are something clients can touch and feel,” says Go.
From solid foundations
Go’s connection to Marc Faber himself goes back 25 years. “He has always been one of my favourite people to listen to about what the markets are doing. He is willing to challenge what’s happening and he backs up everything he talks about with facts.”
While Faber still manages money for a few clients, these tend to be personal relationships of his.
So after a conversation between the two of them, they saw a good opportunity to grow the business on the asset management side.
This ties in to Faber’s focus on emerging Asia, where valuations have the potential to be even more interesting over the next five years.
But rather than being known as a ‘family office’, Go says Marc Faber Group is more akin to a consulting company which selectively helps a few families organise and manage their wealth and related matters.
The two biggest families which Go says the firm is dealing with at the momentare in South-east Asia, but it is also speaking to a few others in Europe which are still looking to relocate their businesses to Singapore.
In such cases, the work involves helping clients organise themselves accordingly, including obtaining their residencies and setting up local operations.
The current portfolio of projects ranges from industrial businesses to a Korean medical company to a trading firm. Commodities is next on the horizon, given the fall in prices and therefore more attractive ventures to target.
But this isn’t just a good way to help clients to diversify assets; Go and his fellow partners at the firm also look to invest. “Everybody wants to try and get some yield,” he explains. “We don’t expect superior returns, but if we get something back in equity in the next five to seven years, then we will be very happy.”
For the time being, the search for yield plays is also taking the firm to the UK, where it is bidding on an airport parking business and other real estate, and to eye opportunities in Northern Spain, which seems to be undervalued at the moment, he adds.
These aren’t necessarily pre-IPO investments. For some, says Go, it’s more of an exit strategy.
No shackles
The firm is very focused on how it services clients, and also on who it wants to work with.
“Our ambition is not to grow our business by a quantum amount, but instead with specific mandates and clients.”
But being part of an independent firm gives Go more flexibility to offer these types of products and services to UHNW clients than he would have within a traditional private banking environment.
This is thanks largely to the current regulatory and compliance environment which is impacting all market players.
For example, to really help families achieve what they are looking to do with their businesses requires advisers to look into the details of the entities they are running and where they have made their wealth.
“Added value is not only going to come from the non-balance sheet business,” adds Go. Another of the differentiators he believes his new firm offers is helping clients address challenges relating to the governance, structuring and intergenerational transition of their wealth.
“This is also one of the reasons why I left the private banking space,” he says. “I want to understand what clients really want and that has to do with corporate governance and family planning for the future, not just using a trust.”
His own personal involvement with a charity called Smile Asia, which helps children with facial deformities in South-east Asia, aligns his goals with those of his clients in this area.
“A number of clients want to set up charities, with various purposes, and we can help them because we have the so-called know-how,” he adds.
Managing Partner at Marc Faber Group
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