Alternative Investments: Alt Investments At HSBC Private Banking Running At Record

September 28, 2020 | Alternative Investments, News
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Global clients have put $1.6 billion into alternative investments with HSBC private banking so far in 2020.

Between January and end-August 2020, HSBC Private Banking received $1.6 billion from its clients for investing in alternative investments. These included hedge funds, private equity, private credit, and a private REIT strategy. (Wealth Adviser)

In contrast, the bank received $1.2 billion during the whole of 2019.

Considering 2020 suffered from the coronavirus pandemic, the performance is creditable. More so when the number of investing clients is factored in – that’s up by 30% over 2019.

Backed by HSBC Group

HSBC Private Banking can create innovative investment opportunities for its clients using its access to the HSBC banking group, as well as other leading alternative asset managers.

It has a 30-year track record in alternative investing.

“Over the past few years, we have seen the growth of private markets investments as an alternative source of funding to public markets, as well as the lines between public and private becoming less defined,” said Henry Lee, Global Head of Alternatives, HSBC Private Banking, to Wealth Adviser. “We have responded by leveraging our ability to identify and provide access to the best investment practitioners and increased the number of opportunities, asset class types, and investment strategies for our private banking clients.”

Lee recommends that a well-considered and researched portfolio of alternative investments can deliver great financial value in the current environment.

Alternative investing

In June, HSBC Private Banking announced that it had raised $1.3 billion for alternative investments in Asia during the period from April 2019 to April 2020.

At the time, Edward Moon, Regional Head of Alternatives, Asia Pacific, HSBC Private Banking, pointed out the advantages that investors can derive from alternative investments:

  • Enhance the resilience of portfolios
  • Consistent return generation (maybe higher than public markets)
  • Especially relevant in the current low-yield situation
  • Diversification and downside risk protection
  • Opportunities in public markets may decline because more companies are choosing to stay private for longer
  • In private equity, capital is invested over multi-year time frames, lowering portfolio volatility

Opportunities in Asia

HSBC Private Banking’s investment outlook for Q3 of 2020 is titled “Re-emerging Asia.” Cheuk Wan Fan, Chief Market Strategist, expects Asia to lead the global post-pandemic recovery with relatively effective virus containment and its strong policy stimulus.

Asia ex-Japan could be the only region delivering positive GDP growth post-pandemic. Four investment opportunities in Asia:

  • Asian companies that will benefit from the new trends of remote working, cloud computing, online learning, digital payments, eCommerce, online entertainment, contactless food delivery, and online medication.
  • China will upgrade technology and manufacturing to mitigate the risk of supply chain migration. Focus: companies in the sectors of 5G, robotics, smart manufacturing, and digital supply chain upgrades.
  • Opportunities from Asian stimulus measures. Supportive for Asian equity and credit markets. Companies in infrastructure, underdeveloped property developers, and banks.
  • Asian credit opportunities arising from accommodative central bank policy and fiscal stimulus. Chinese hard currency and local currency bonds will attract inflows from investors seeking yield. Asian bonds and high dividend stocks.

Related Story:     Liquid Alternatives: “A Must-Have Component” To Weather Volatility

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