NOAH Holdings is seeking to as much as double the number of managers it employs in Hong Kong and Singapore to look after wealthy clients to handle an increased flow of capital from mainland China.
The Shanghai-based firm, which has about 150 billion yuan (S$28.7 billion) under management, plans to boost the number of relationship managers in the two financial hubs to about 150 to 200 by the end of the year from 100 now, Pan Qing, its chief financial officer, said in Hong Kong.
“We are pretty optimistic about the growth,” said Pan. “We know that the economy probably isn’t going as fast as we wanted it. But we believe it still has enough dynamics and a deep enough market, especially for the sector we are serving which is mostly Chinese private entrepreneurs.”
About 70 per cent of the managers are in Hong Kong and the rest in Singapore and the hires will likely follow roughly the same split, he said.
The private bank is expanding overseas as China’s rich are looking to diversify their wealth. Hong Kong has long been a conduit for mainland wealth, but during Covid and as Beijing tightened its political grip on the city, wealthy Chinese flocked to Singapore to set up family offices.
According to Noah, Hong Kong serves as a “significant hub” for mainland investors looking to access global markets, while Singapore has been enhancing its wealth management sector through incentives and regulatory changes, which have attracted Chinese clients.
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Noah is also exploring the licenses needed to set up in Dubai, given interest from clients, but is being cautious as its costly to set up new offices, said Pan.
“It’s definitely one of the destinations we are keeping very close eye on it,” said Pan, adding that they want to make sure the demand is “sustainable”.
Noah sees a mix of demand from wealthy Chinese for onshore and offshore products. With higher US rates, there has been demand for offshore fixed term deposit, insurance plans and money market funds, said Pan.
Noah, founded in 2005 by former private banker Wang Jingbo and named after the biblical character, became the first Chinese asset manager to list shares in New York in 2010.
In 2019, the firm was roiled by the collapse of Camsing International Holding that left investors who bought credit products linked to the latter with losses. In 2020, Noah offered a share handout to settle with investors.
According to Pan, the firm has stopped selling such products and has reached a settlement with investors in relation to Camsing.
The wealth manager has also been consolidating its operations from around 44 cities to 25 cities, as the firm shuts branches in third and fourth tier cities to focus on bigger cities, according to Pan.
As at the end of 2023, the number of domestic relationship managers slid by 7.6 per cent year over year to 1,163, according to a transcript of its most recent earnings call.
“I think the strategy has shifted a little bit from the past,” said Pan. “Our clients moved their family to first tier cities because of education. The hospital medical, you know, is much better,” said Pan. BLOOMBERG
