Winners rationale

This year, Asian Private Banker introduced the ‘Bespoke Discretionary Portfolio Management (DPM)’ award to recognise those private banks whose capabilities extend to meeting growing regional demand for customised solutions, whether through mild tweaks to meet client preferences, access to non-traditional underliers, or truly unique asset allocation strategies.

Unlike many of its competitors that cover a vast range of clientele and develop discretionary solutions with an eye on scalability, Goldman Sachs Private Wealth Management focuses exclusively on delivering bespoke solutions to an UHNW segment whose needs grow more intricate by the day.

Fundamentally, the bank goes to great lengths to understand the wealth objectives and circumstances of the client before constructing a portfolio — a process that is based on its proprietary multi-factor asset allocation model where positions are implemented via its wide shelf of actively managed modules. And amid an evolving market environment in 2018, the private bank asserted its status as the leader in customised DPM solutions on account of its nimbleness and innovation.

Indeed, turbulence and uncertainty in equity markets last year led the bank to focus on three key areas: generating gains during volatile periods, protecting the downside, and boosting alpha with enhanced stock-picking capabilities. Using its equity option writing solution, Goldman Sachs was able to harvest premiums from volatility to add incremental yield and reduce overall portfolio risk. Through its equity structured investment solution, the bank generated low volatility returns with a downside buffer of at least 10% and leveraged upside participation. And to boost alpha, Goldman Sachs was smart to leverage in-house big data capabilities and machine learning techniques to augment security selection.

For fixed income, while the bank experienced some outflows from its high yield module, it was able to shore up assets through the introduction of a private credit solution. Addressing a region-wide aversion to illiquidity, the mandate blends liquid and illiquid fixed income assets for potentially earlier distribution and shorter lock-up periods.

Ultimately, Goldman Sachs in 2018 demonstrated its deft ability to adjust to market conditions and client behaviours — in the process posting robust performance across the board and achieving strong net inflows in Asia, leading to a DPM penetration rate that sits well above the regional average. Admittedly, few banks are capable of providing genuinely tailor-made solutions to a broad range of clients. And in this rarified echelon of private wealth managers, fewer still can lay claim to having institutionalised the art of customising and managing solutions to the individual client. Goldman Sachs, however, sets the gold standard for bespoke DPM.

Goldman Sachs is Asian Private Banker’s Best Private Bank – Bespoke Discretionary Portfolio Management for 2018.