Winners rationale

Rich valuations of public markets in 2019 kept pushing high net worth individuals to gain exposure to private markets and, more broadly, alternative assets. Yet few private banks could showcase their capability as well as HSBC Private Banking did in 2019 in terms of guiding clients to build up exclusive, best-in-class alternative portfolios with a tactical focus on the late market cycle.

By making the most of the bank’s partnership with HSBC Alternative Investment Limited, the bank secured exclusivity for 75% of private market funds and 50% of hedge funds that were launched in 2019. Instead of taking a lot of directional and high liquidity risk, those bespoke solutions had an undue focus on downside protection during market dislocations, in a bid to better help clients navigate a volatile investment climate.

On its alternatives platform, rather than broadly stuffing its product shelf, the bank maintained a strong bias towards those best-in-class champion strategies in each category. In 2019, HSBC Private Banking launched 10 private market funds and hedge funds covering four major themes and ideas: US focused equity long short hedge fund, core hedge fund, Vision 2019 (a diversified private equity portfolio across primary, secondary and co-investments), and a global secondary fund.

A rigorous due diligence process and high standard in selectivity pays off. The bank’s core hedge funds portfolio recorded a 6.98% of alpha against MSCI World Index over the past 12 months and delivered an impressive 2.34 of Sharpe Ratio versus MSCI World’s 0.55. The strong relationship with managers also enabled the bank to win meaningful fee discounts for clients. This strong performance as well as the favoured terms led the bank to receive a record high inflow of the region’s wealth last year.

Bearing in mind that Asian investors remain green in terms of investing in alternatives compared to those traditional long only assets, HSBC Private Banking kept enhancing its digital distribution platform to provide a one-stop shop knowledge platform for clients. Additionally, in 2019, the bank organized over 10 educational events with reputable hedge funds and private equity managers, which gained tremendous positive feedback from clients.

For these reasons, HSBC Private Bank is Asian Private Banker’s choice for Best Private Bank – Alternative Advisory in 2019.