The study, based on a survey of HNW individuals in these financial centres, uncovers differences in how they choose to gain access to private market assets and hedge funds.
High net worth investors in Hong Kong are far more likely to use
digital platforms to make private market investments than their
Singapore peers, according to a survey of 492 such persons by
Endowus
Private Wealth, an organisation founded in 2017
and regulated in Hong Kong and Singapore.
The report comes at a time when the way that HNW people try to
access private markets (private equity, credit, venture capital,
forms of real estate) is being questioned, given the large
inflows into the area as investors seek the illiquidity premiums
on offer.
Digital investment platforms are the preferred mode of access for
private market and hedge fund investing in Singapore (37 per
cent) and Hong Kong (57 per cent). The study found that Singapore
HNW individuals are slightly more likely to tap into these
markets (21 per cent) via private bank relationship managers than
is the case for those in Hong Kong (18 per cent).
The study was conducted by YouGov Singapore from February to
March 2024.
Better investment returns is the top priority for HNW investors
in Singapore (48 per cent), followed by concerns such as keeping
up with inflation, excessive risk taking, diversification and
high fees.
This differs slightly from Hong Kong, where respondents ranked
greater portfolio diversification and succession planning as
their top concerns.
More than half of respondents in both markets also indicated that
they are “optimistic” or “very optimistic” about the 2024
economic outlook, with Singapore investors demonstrating a
slightly higher risk appetite to grow their capital (71 per cent)
than their Hong Kong counterparts (66 per cent).
Digital shift
The report said that even though 45 per cent of Singapore
respondents picked “private banking services through relationship
managers” as their current avenue of investing in private assets,
only 21 per cent considered it their preferred mode of
access.
“The waning dependence on relationship managers may suggest
increased sophistication in the client base, sensitivity to fees,
a desire for lower minimum ticket sizes, information
transparency, and being served through conflict-free business
models,” the report said.
“This trend is mirrored by an observed shift towards
self-directedness, or self-managed portfolios in Singapore. A
majority (71 per cent) of Singapore respondents indicate that
they manage their investment portfolios (across public and
private markets) entirely or mostly on their own, contrasting
with the majority (60 per cent) in Hong Kong who manage their
investments mostly with the help of a relationship manager or
financial advisor.
Digital wealth management platform, Endowus has raised $95
million in funding from investors including UBS Next, Citi
Ventures, MUFG Innovation Partners, EDBI, Lightspeed Venture
Partners, Prosus Ventures, Samsung Ventures, SBVA, Singtel
Innov8, and Z Venture Capital. Other investors include large
Asian family offices, and the founders and staff of Endowus.
