Published 5 May 2011
The Business Times
By Genevieve Cua
Citi Private Bank sees clients still keen to be invested
Singapore’s elections are unlikely to affect property prices, says Citi Private Bank chief executive (Asia Pacific) Aamir Rahim.
Citi will host its Asia Pacific property conference today for more than 200 clients. The conference features talks on key issues including the outlook for equity markets, for China, Hong Kong and Singapore real estate as well as Reits.
A joint annual report on the world’s wealthy, published recently by Citi and Knight Frank, found that Singapore was a leading location of choice among wealthy Indians and East Asians looking to buy a second property overseas.
It also found that Singapore luxury homes had chalked up the third largest price rise last year, growing by 18 per cent. In pole positions were Shanghai and Mumbai.
Mr Rahim says: ‘… property is critical because it is part of the decision that the wealthy make in terms of where they want to establish themselves. East Asians who seek to change their country of residence favour Singapore … and property plays a very key role in that decision.’
Mr Rahim is optimistic about the private bank’s growth this year, which he expects to be roughly in line with last year’s 20 per cent growth. The bank’s business grows at roughly twice the rate of GDP. Asian economies are expected to grow at a 7.8 per cent clip this year.
Citi Private Bank boasts assets under management (AUM) of US$185 billion in Asia Pacific; it claims to be the region’s largest wealth manager. It serves clients with at least US$25 million in net worth.
Mr Rahim says clients are open to investment opportunities. Citi, for instance, successfully raised funds recently for a Chinese private equity fund. Earlier this year it also successfully marketed a UK property fund. He declined to specify the amounts raised.
In the current year-to-date, its funds distribution business has comprised roughly 50 per cent traditional funds; 30 per cent private equity; and about 15 per cent hedge funds.
‘If you have the right proposition that addresses client concerns, and is very specific about the opportunity and is well timed, we advise clients to invest. We approach that through asset allocation.’
The bank offers an ‘investment lab’ service where a team of quantitative experts can analyse clients’ portfolio exposures.
‘Clients get a comprehensive understanding of the sensitivities of the portfolio to interest rates, changes in currency values, to any drop in property prices; is there too much or too little leverage … Different clients have different factors driving their decision making. We do a sensitivity analysis so they at least understand the risks they take.’
Clients’ cash weighting is estimated at about 30 to 40 per cent at the moment, which he says could be ‘right’ given the market volatility. Markets this year have been rocked by tensions in the Middle East and Japan’s earthquake and nuclear disasters.
‘It’s hard to say that clients are under-invested. For the near term volatility, their cash positions could be right. But as we go forward, clients will be looking at some trends which are continuing (such as) inflows of capital into Asia. We see consumer plays in Asia having strong legs. And there is still the desire for yield, a desire to be invested because bank deposits generate very low yields.’
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