Adapting the Model to Match Market Needs & Expectations in Thailand

When we last spoke to Dr Win Udomrachtavanich in early 2020, he was Executive Chairman of KTBST Securities PCL (KTBST SEC) , a role he had assumed back in 2016. Today, he is Chairman of KTBST SEC and is also Executive Chairman of KTBST Holding PCL (KTBST) , the holding company that is 70% owned by Korea’s KTB Group and 13% by Dr Win himself. This time, roughly a year after the pandemic closed off so much of the world, and with it, a large slice of the Thai economy, particularly tourism-related, Win continues to focus on wealth and asset management as a major opportunity for the KTB Group business in Thailand. Although the actual expansion of private wealth has slowed somewhat due to the global economic downturn, HNW and UHNW clients are more intent than ever on wealth preservation and finding opportunities to help them further build their wealth. Win reports that as these investors scour the world for returns, the firm has been adapting its expertise and services to delivering these clients the right solutions and the appropriate platforms to execute what has become a significant shift towards more international assets. A highly accomplished pianist who used to perform at concerts in his youth, he explained how he is orchestrating the KTBST businesses to deliver the best level of products, advice and service today, while aiming to also future proof the business by adding new operations, for example with plans well advanced to move into the world of digital assets.

KTBST dates back all the way to 1997, the year of the Asian financial crisis, and it was in 2016 that Win and his Korean partners took control and restructured the group, sharing a vision of building an institution that they hope helps clients, both individual and corporate, nurture a more sustainable relationship between both sides of their balance sheets.

KTBST Securities PCL, or KTBST SEC as the firm is now known, provides securities brokerage services, covering securities and derivatives trading, investment banking, commodity brokerage, underwriting, mutual funds, wealth management, and advisory services to investors.

KTBST SEC is owned by KTBST Holding PCL (KTBST), of which Win is now Chairman and which is 70% owned by Seoul-based KTB Securities and Investment, with the rest owned by several Thai investors.

Diversifying the revenues

The KTBST Group in Thailand today comprises the holding company KTBST, KTBST SEC, KTBST REIT Management Co Ltd., KTBST LEND Co Ltd.,and WE ASSET Management Co Ltd, as well as a new online service and digital assets platform via  WE DIGITAL TECH Co Ltd.

The main business areas are commission fees from trading services for securities and derivatives (an estimated 35% of revenues), commission fees for fixed-income business, mutual fund sales agents, private funds and investment banking services, representing another roughly 40% of revenues, and fees from foreign investment, block trades, interest income and dividends making up the other 25% of revenues.  

In his current leadership positions, Win oversees the securities, asset management, Welfare and personal loan, Life and Non-life insurance broker and also the new digital assets advisory platform.

Very robust growth in 2020

“I have taken much more of a strategic role today, and promoted key people from within to take control of the day-to-day management of these businesses,” he reports. “My role is really to help them achieve the goals we all decide upon. The group derives some 90 per cent of our business from securities and asset management, with wealth management integral to all our activities.”

“We have been lucky in Thailand that wealth and asset management still keep growing, even throughout the bad time of the pandemic,” Win comments. “Our wealth management AUM actually grew a remarkable 50% plus last year, and our asset management AUM more than 70%, as well. But at the same time, we are witnessing a migration of investments to offshore assets, with buyers picking on key sectors such as technology, healthcare, green energy stocks and so forth. They did pretty well, even in a very difficult year.”

Sharp rise of foreign assets

He explains that typically in the past wealthy investors would have some 20 per cent roughly in foreign assets, but that many clients in 2020 increased that to more than 50% of their investible assets. A second trend he has witnessed is an growing role for RMs and advisors in helping those investors identify and track foreign investment opportunities, and that these clients are much more receptive to learning than in recent years. A third key trend is the whole digitisation of onboarding and KYC, ongoing relationship management, compliance, transacting and reporting.

With regard to foreign investment, Win explains that the first nine months of 2020 saw investors clamour for mostly US assets, predominantly the tech sector. “And after the election, they started to focus on North Asia, for example, China, Korea, Japan,” he reports. “If you compared all of these foreign investments last year, they significantly outperformed local investments, so these private clients have been targeting the right assets and sectors, and their portfolios performing surprisingly well in many cases.”

Leveraging external capabilities

As to locating the right opportunities, Win explains that the firm works in partnership with a variety of platforms and foreign partners. For example, in mutual fund investment, KTBST SEC uses the All funds platform, he explains, directing clients to invest in global funds via that platform. For equities, the firm also partners with Saxo Markets, and with global houses such as Philips, Credit Suisse, UBS and JP Morgan for structured products and derivatives as well. “We had a very productive year working with such partners in 2020,” he reports.

He adds that on the asset management side, he reports that the firm set up more than 10 feeder funds that thematically outperformed last year, including tech, Health Care and China funds, amongst others. “Last year the gap between domestic and offshore asset performance was over 10% in favour of foreign assets,” he explains, “so the motivation for investors is clear.”

Dr Win’s Key Priorities

Win’s first mission is to ensure the continued enhancement of the firm’s internal digitisation and rollout of digital services for clients, driven by technology and also greater adoption by team members and the customers.

“We have been advancing well in these areas,” he reports, “but I think we still have plenty of room to improve.”

“The regulatory environment is generally becoming more supportive of more digital onboarding for clients to make it more efficient, and there are further changes in the pipeline we expect to make things easier generally in this world of remote working, for electronic signatures, KYC, remote advisory and other protocols. The regulators are looking positively into these areas for the industry.”

The second mission is to mine out more good opportunities for the firm’s investors. “We still believe that foreign assets will outperform the domestic assets in 2021, so we need to feed good ideas to the client base. There is some easing by the regulators in terms of the procedures to permit foreign investments. In the past, we have had to ask for the remittance quota from the Bank of Thailand and approval from the SEC, but they have been scrapping some of the restrictions, so typically it is considerably easier to make foreign investments today.”

His third priority is to capture the momentum in the digital assets market. “We have more and more clients interested in cryptocurrencies and tokenised investments, so we need to raise our understanding of these markets ready to offer valid advice in these areas,” he says.

Moving with market trends

His closing remark is that the industry as a whole will continue to expand the range and efficacy of online or digital platform services, including for investments, advisory, asset allocation, analytics, reporting and other areas. And the industry broadly will push ahead in terms of its sophistication and coverage of foreign assets, recognising that there has been a significant shift in investor behaviour. “And we are all trying to find ideas and products that can slightly differentiate us from the competition,” he says, “so that is another motivational driver for the year ahead.”

Getting Personal

Win Udomrachtavanich, PhD., has some two decades of experience in the world of finance, in Thailand and abroad, and with an outstanding academic background – he holds a Doctorate in Economics & Banking- he is clearly a dynamic, results-oriented leader with a proven track record, a keen focus on best practices, and a strong belief in people skills to drive businesses forward.

He joined forces with his Korean majority partner, KTB Group, to take control of, restructure and recapitalise what since 2016 have been the KTB businesses in Thailand, ending up himself with a 13% stake. Before that he was Chief Executive Officer at One Asset Management (ONEAM), moving there from a role as Director in private banking at Credit Suisse in Hong Kong. And before that, he had worked as a fund manager at Kasikorn Asset Management (KAsset) and Chief Investment Officer at Asset Plus Fund Management (Assetfund).

He explains that seeing his role and success at ONEAM from 2012 through 2016 encouraged Korea’s KTB Group to become interested in him as their local partner for their expansion plans in Thailand, an arrangement that continues to work well today.

Win is an enthusiastic and avid thinker about the evolution of the financial sector and its role in society and is a regular guest speaker at Stock Exchange of Thailand (SET), the Association of Investment Management Companies (AIMC), the Thai Bond Market Association (ThaiBMA), Thai Professional Finance Academy (Thai PFA), as well as offering some academic lectures at Chulalongkorn University and the National Institute of Development Administration (NIDA).

Win earned his bachelor’s degree in engineering from Chulalongkorn University, then his Master’s degree in Engineering from Old Dominion University in the state of Virginia, USA. Realising then that his future would be in finance, not engineering, he went on to gain his doctorate degree in Financial Economics & Banking from the University of Missouri, Columbia, graduating near the top of his class.

His passion for learning remains to this day, and he reports that he has enjoyed some quieter times with far less travel and far fewer physical meetings – never easy in Bangkok’s congested streets - to learn about digital asset. “I am not so young, nor am I so tech savvy,” he says, “but I have committed myself to learn a lot this past year about digital assets, tokenisation, blockchain and these new areas of endeavour in the world of virtual assets and virtual exchange and custody. And to turn this into a business, we have now established a new company, WE DIGITAL TECH Co Ltd., to move into these areas commercially, as this is very much the future. For people of any age, it is a good thing to learn about these new areas of the world of virtual transactions and virtual assets. Learning is the key, we need to change according to the world.”

When not working, lecturing or speaking at events, Win is a committed family man. He and his wife have two lovely daughters of just five and three years old.

Outdoor pursuits include golf, often at his favourite Amata Spring course outside Bangkok. And quiet time after the children settle at night might be spent enjoying fine wine or single-malt whiskies from both Scotland and Japan. “I am an investor in both of these,” he reports, “so I combine my interest with an active personal investment programme, storing the collection in both Ireland and Hong Kong.”

Win is also a talented pianist, having been considered highly gifted as a child when he often went around Thailand competing in music festivals and giving recitals. “I play regularly at home nowadays,” he explains. “It is both a great love of mine and a great way to relax. And during this pandemic, spending more time at home, it has been a great source of relaxation and joy.”