Vistra Sets Out its Multi-Faceted Private Wealth Stall for Asia under its Virtual Private Office Banner
Feb 9, 2021
Vistra is one of the world’s top three independent corporate services providers with 4,600 professionals, 82 offices worldwide and operating in 46 jurisdictions. The firm provides expert advisory and administrative support services to major corporations, SMEs, high-net-worth individuals and any other organisations or individuals that need help incorporating or managing a company in many jurisdictions worldwide, and prides itself in being able to help with just about any query around structuring. Hubbis ‘met’ with Chris Marquis recently. As the London based global head of the private wealth sector, he and his team are increasingly busy in all four corners of the world, at least virtually at this time. In Asia, perhaps Vistra’s key engine room of growth looking ahead, the growing ranks of HNW and UHNW families are adopting considerably more formalised wealth and legacy planning, and are increasingly attuned to the need to adopt sophisticated, fit-for-purpose structures for their business holdings and their wealth for robust succession and to position their families for multi-generational longevity.
Marquis opens the discussion by remarking how core Asia is to the Vistra’s ambitions, especially as the firm has its major shareholder based in the region in the form of Baring Private Equity Asia, which bought the firm over in 2015. Marquis himself is now based in London but looks back with positive memories on his 13 years in Hong Kong, where he used to run HSBC’s global wealth and succession planning business. Today, as global head of Vistra’s private wealth business for the past 18 months, Marquis is now itching to get out on the road again to clients and colleagues in Asia, but of course such designs must wait.
Asia at Vistra’s heart
“My role is to generate significant growth across the private wealth sector globally under one cohesive strategy,” he reports. “To do so, we have a pool of over 300 private wealth SME subject matter experts, all of whom are delivering private wealth services to our valued clients worldwide. Asia is central to our growth plans, and we are of the view that organically, Asia will offer the most growth potential ahead.”
Vistra has also expanded rapidly over many years by acquisition. It has a lengthy history dating back to 1996, and a key transition occurred in 2006, when the firm was re-branded as Vistra. A spate of acquisitions then ensued, Vistra then opened its Hong Kong office in 2009, the same year as Carlyle Group sold majority control to IK Investment Partners. In the few years that followed, Vistra completed yet more deals, opened a number of other offices, including in 2010 alone, offices in Singapore, the UAE, Malta, New York, Frankfurt, as well as partnering with Centrapriv Group in Zurich and buying into a China-based trust and corporate services business in Guangzhou.
From 2011 through 2015, Vistra completed numerous new deals, partnerships, acquisitions and opened many new offices around the globe, attracting Baring Private Equity Asia, one of Asia’s largest and most established independent private equity firms, to acquire a majority stake in Vistra Group from IK Investment Partners in 2015. With Baring Private Equity Asia based in the region, it is little surprise that Vistra’s global CEO sits in Hong Kong today.
Then ensued another four years of vigorous global expansion to the point where Vistra today spans across the globe with 82 offices across 86 jurisdictions. Key Vistra services today include Marquis’ responsibility, the Private Wealth business, which centres on providing effective and sustainable succession planning solutions for high net worth individuals and families. Other core areas include Private equity/Real Estate (fund establishment and administration), Capital Markets (establishment and administration of CM/debt related structures), Corporate (incorporation, company secretarial, accounting tax, payroll services for companies), and Company Formations (Vistra is one of the world’s largest wholesalers of corporate vehicles).
Marquis characterises Vistra as an organisation dedicated to facilitating international capital flows, to protect investors and to safeguard their assets across multiple industries and geographies. “From a private wealth perspective, a lot of the work we do with ultra-high net worth and high net worth families is around how we protect and transfer their assets to future generations,” he comments.
“And Asia clearly is an extremely important market for Vistra from a private wealth perspective. The growth in wealth is extraordinary - the Knight Frank Wealth report of 2020 highlights expected growth in UHNW individuals of over 40% in the next 5 years in Asia. When coupled with the unprecedented intergenerational wealth transfer taking place, often the first significant transfer, this creates significant opportunity for an internationally focused, top tier firm like Vistra to be a critical part of the client’s advisory ecosystem.”
Marquis reports that from a new business origination perspective, Asia is the fastest growing market for private wealth. “China is certainly a key driver as there are many family businesses listing on the markets, including of course in Hong Kong and the US, and we can provide all types of services and advice for pre-IPO structuring, employee benefit structures, and of course we are helping not only the founders and families but other directors and shareholders, many of whom become wealthy via their listings. Our Singapore business is therefore thriving alongside the China momentum, and so too is Hong Kong, as this type of growth is resonating across the region.”
He explains that from a private wealth perspective, Vistra has the ability to offer Singapore structures, Hong Kong structures or often families prefer their structure to be in another jurisdiction with the relationship being managed where the culture of the families is well understood and where they feel comfortable. “We work closely with clients and their advisors, and we listen to their preferences for a particular jurisdiction,” he reports, “or they may listen to our advice in this regard. We have an ecosystem of bankers, private client lawyers, private client tax advisors and other professional advisors across China, Hong Kong and Singapore. Critical to the success is Vistra’s investment in China which includes specialist private wealth business development resources, which are highly complementary to our expertise in the wealth management centres of Singapore and Hong Kong.”
The sweet spot for Vistra in Asia is the wealth of USD5 million to USD30 million and then of course the smaller but immensely wealthy UHNW segment. “What we have been finding is a clear trend towards the UHNW end of the market,” he explains. “We like to do business with families and advisors that are thinking strategically about their need for their succession, and who are willing to invest the time to formulate structures that work today and that will be sustainable across generations. We often need to educate clients on the need to relinquish a degree of control over their assets in order to ensure the integrity of the structure. Credibility through technical knowledge, responsiveness and the ability to build a high degree of trust is critical. It is evident that the quality of the people that we have in Vistra is really high, as they need to create robust structures that are relevant to these clients but also provide a degree of flexibility to stand the test of time.”
Marquis observes that the firm’s private wealth clients are more sophisticated and knowledgeable than in the past, are seeing the need and are more willing to pay for legal and tax advice prior to their establishing their structure for succession planning, and that the second and younger generations are more involved in family succession planning and structuring than ever before. ‘’I can’t over emphasise the importance of planning appropriately, not just in terms of jurisdiction but in the selection of a private wealth provider with the expertise, knowledge and the team capable of building long term, multi-generational relationships. It’s not a decision to be taken lightly and the key to success is the respect and understanding of the roles and responsibilities of all of the stakeholders. We also see that more families are willing to relocate to business-friendly countries to ensure stability for livelihood, lifestyle, and tax.’’
“In Singapore,” he reports, “there is a real focus on attracting family offices. The number of SFO in Singapore has increased fivefold between 2017 and 2019 and the number of family offices being set up is currently at about 200. In Asia, Singapore is often preferred by ultra-high net worth individuals and families as a jurisdiction to manage their wealth due its political stability, the presence of a large talent pool of competent finance professionals, high level of transparency and standards of governance, and a robust legal and judicial framework.”
Marquis also comments that wealthy families in Asia are becoming much more international in nature, with many of the younger generations educated in the US, UK, Australia, Canada and so forth. “They are therefore more predisposed to put the right structures in place that work for families across generations and jurisdictions in which they might have businesses, assets or family members,” he explains.
Channelling new business
New business is derived through the three channels, he reports, which include the firm’s extensive intermediary network. “What we have found during this pandemic,” he says, “is that our geographically diversified business model and the considerable strength of our relationships has allowed us to keep originating new business despite the restrictions around travel and face to face meetings.”
“Clearly, I’m very familiar with the bank owned trust companies from my time with HSBC. This part of the sector plays a very important role for families who are comfortable with their structure being banker led. It also provides great opportunities for firms like Vistra who are solely focused on, and remunerated, for providing private wealth structuring solutions and have greater appetite for more bespoke solutions across a wider spectrum of asset classes. We can also be truly agnostic when it comes to selection of investment managers, which is an important consideration for many clients who are multi-banked. As banks focus on a more narrow range of clients and solutions, we are seeing more referrals from them as they send their clients to us to structure their business assets or unique assets that the bank considers to be outside their range of expertise or possibly appetite. I also like the fact that our clients pay us directly for what we excel at – they need to see and appreciate the value.”
The second major channel, he reports, is referrals from existing clients. “It is a testament to our efforts and results that more clients are comfortable to refer their contacts, friends and family members to us, so this is a really important channel for us. It’s the litmus test of any successful private wealth business.”
And the third channel is the Vistra group itself. “Vistra is a global organisation, so we have many levers connecting in different areas to the HNW and UHNW community worldwide. This allows us to work more closely with families and across their generations. We are thereby providing the peace of mind that comes with having sound governance, advice and security as families look to expand their businesses internationally, and handle their overall wealth.”
This, he adds, is especially relevant to the next generation who often see the world through a different paradigm to the founder generations in Asia. “Whilst they respect the way that the family wealth has been created, they have their own ambitions, and where we see such families thrive is by working well together, with trust, that they can expand and extend the family dynasty, secure their legacy and accommodate the different ideas and visions throughout,” he elucidates.
Overcoming today’s challenges
Marquis reports that despite the difficulties of the pandemic, business is resilient, the firm has adapted rapidly and well, and most of the key challenges are being overcome. Nevertheless, it is a reality across the industry that the pace of new client acquisition has slowed and that some clients are naturally under financial pressures themselves as their businesses need attention. “One of the great attractions for me to the private wealth sector is that we operate in a highly personalised and relationship driven business. However, lead times are getting longer and less certain due to the lack of face-to-face contact,” he reports, “but we remain positive that we have adjusted well, as have our clients, prospects and range of intermediaries. With rollout of vaccines across the world, we all look forward to getting back to normal before too long,” he reports.
Marquis comments that as they see the continuing first wave of intergenerational succession across Asia, it is a strong positive that families are facing up to the often-difficult issues as to how they transition their family businesses and their family wealth to the next generations.
“This is all still relatively new for the Asian client base, which obviously creates quite a lot of opportunity for us,” he says.
“We see that a significant number of family businesses are due to change hands in the next five years, and there is a real desire for these businesses to stay in the family given the leadership of the family to be successful and the entrepreneurial nature of these families. The reality is that the majority of these families will not have really thought through how this is all going to take place. It all offers immense opportunity for our experienced team.”
The firm’s proposition in the private wealth sector focuses on three dimensions of the wealthy cycle - creation, preservation and transfer of wealth. “And the true focus of our private wealth business is around the transfer and the preservation of the family wealth – we facilitate further wealth creation through the work we do with the next generation. To achieve that, we also include a number of different services under an umbrella label as our virtual private office platform. At the core of that proposition is succession planning and asset protection through the structures that are holding the family assets, whether they be liquid assets, family businesses, unique or alternative assets, or commercial and residential property.”
He explains that the firm is also helping an increasing number of clients with structures that are focused on philanthropy, and there is a rising focus on sustainable investing and broadly for family governance. “There is a greater focus on societal matters and family values determining directions of the wider family enterprise. So we focus on key areas such as philanthropic advisory, governance, and business succession, combined with the succession planning, the trustee and corporate services, so that it all comes together under the virtual private office platform,” he explains. “UHNW clients have a really broad range of needs, and therefore we also partner with advisors that we trust to offer a truly well-rounded service to these families. A positive outcome from the global pandemic is the way that UHNW clients have responded with impact to support immediate health care needs. Giving back to society aligns with the core values of many of the families we look after and is one of the most rewarding aspects of what we do.”
In terms of jurisdictions, Marquis also explains that for diversification purposes, some Asian families take advantage of Vistra’s well-diversified network as they may actually prefer to have their planning structure well away from where they live and where their businesses are located. This means that although the clients might be in Asia, Vistra is servicing their needs across perhaps Jersey, Switzerland, the US and through other locations. ‘’That’s the beauty of having a sizable presence in all of the pre-eminent private wealth centres.”
The VCC beckons
Singapore has been interesting for the firm this year, with the January introduction of the Singapore Variable Capital Company (VCC). “If combined with the traditionally recognised and trusted Cayman Islands fund model options,” he notes, “Singapore and the Cayman Islands together facilitate significant and beneficial investment fund structuring options available to asset managers in the broader Asian investor marketplace.”
He also highlights how Hong Kong has risen again as China has recovered momentum. “China provides lots of opportunities to many foreign investors from various industries,” he says. “In recent years, China’s Greater Bay Area (GBA) has reinvented itself to become a highly appealing location for foreign investment, although it can be quite challenging for western businesses to do business in China due to language barriers and cultural differences. As such, Hong Kong, the long-standing international financial hub, is the ideal springboard for companies looking to expand into Asia and Vistra’s local knowledge in China is highly complementary to delivering desired outcomes.”
Marquis draws the discussion towards a close by commenting that Vistra plans to increase its business development drive globally, but especially in Asia. “And of course, we are continuing to search out interesting opportunities for growth across Asia, through partnerships, acquisitions and collaboration. To do so effectively, we want to raise the profile of our private wealth business, becoming really top of mind when it comes to a wide variety of services that we offer.”
Getting Personal with Chris Marquis
Marquis was educated in Australia, but has worked in different centres around the world, including stints in the UK, Switzerland, 13 years in Hong Kong and he and the family now live in leafy Surrey, Southeast of London. He has an English wife and three children all of primary school age, one of the reasons, he says, for relocating back to the UK a couple years ago.
When he has time, he likes to exercise and get outdoors, with the family whenever and wherever possible. “There's some very picturesque countryside around where we live,” he says, “so I chase after the children on their bikes, running alongside and trying to keep up.” Golf is another pastime, he is an 11 handicapper with, he says, perennial hopes of getting to single figures, but with that reality tantalising elusive. “Maybe if I had more time…” he muses.
Working with entrepreneurially minded clients and colleagues and seeing tangible client outcomes, many which result in further wealth creation and investment back into society are the real driver’s behind Marquis’ passion for his career in the Private Wealth sector. ‘’No two days are every the same… it’s the variety of what I cover, personal relationships and striving for success in a dynamic world which motivates me’’.