UBS woos Asia's richest amid incredible wealth spurt

Written by Bloomberg | Updated: Oct 7 2010, 15:36pm hrs
UBS, Switzerlands largest bank, is putting more focus on its richest clients in Asia and bringing its investment bankers closer to asset managers to meet their demands.

Wealth managed for clients with at least 50 million Swiss francs ($51 million) of assets will grow annually by about 10% to 20% in the region over the next three to five years, Carlo Grigioni, vice chairman of wealth management at UBS in Singapore, said.

If you look at what happened in Asia over the last 20 years, theres incredible wealth creation so this is probably going to become a very important piece of segment, Grigioni said. Thats why we have brought the wealth management business and the investment bank closer.

The number of ultra-rich Asians climbed 37% in 2009, about double the global pace, according to Capgemini SA and Merrill Lynch Wealth Management, as the region led the global economic recovery. UBS will add advisers in Asia to match the growth of its richest customers, Grigioni said.

UBS, Switzerlands largest bank, manages 300 billion Swiss francs globally on behalf of the ultra rich. About a third of its 1,000 client advisers in the Asia-Pacific region cater to these clients, drawing on UBSs investment banking resources.

480 advisers

The bank, the worlds second-largest wealth manager in 2009 after Bank of America Corp, employs 480 client advisers dedicated to its ultra-rich clients, according to Grigioni. They each manage an average of $450 million and the bank is looking to increase that figure to $500 million, he said.

Grigioni said the richest customers typically invest globally and have a better understanding of economic and investment opportunities than other investors. Its like the BMW 300 and BMW 750, he said. Its a different league.

Advisers work with corporate finance teams on large asset sales, mergers and acquisitions, and initial share offerings, as well as issues like the transfer of wealth and businesses over generations, Daniel Harel, UBSs head of private banking for ultra-rich clients in South Asia, said.

You would need to have the economies of scale and infrastructure in place, which is basically a big private bank on one side and a big investment bank on the other side to be able to make this business a viable one for both the client and the bank, said Harel, an investment banker for 17 years before his appointment to his current role in September last year.

Rising rich

The number of ultra high net worth individuals people with at least $30 million of investible assets in Asia-Pacific rose 37% to 19,600 last year, and their wealth grew 43%, Capgemini and Merrill Lynch Wealth Managements report showed last week.

UBS appointed Amy Lo to run ultra high net worth business in Asia-Pacific from January 1, according to an internal memo obtained by Bloomberg News. Lo is currently regional market manager and head of ultra high net worth in Hong Kong. The region currently accounts for 30% of UBSs managed assets for the ultra-rich.

Serving the very wealthy isnt without its perils, Gerard Aquilina, vice chairman of Barclays Plcs wealth management unit, said last month. The richest clients often have impossible requests, narrow margins and trigger internal conflict with investment banking colleagues, he said.

Grigioni said these clients are extremely demanding, needing extensive research and advice, with some expecting lower prices. Margins across-the-board have dropped dramatically in recent years as clients seek less leverage and more conservative investments, he said, while adding that their business remains important.

You cant be complacent, you cant let it go, Grigioni said. If you can provide solutions which are perceived by your clients as value added, really something which is great, you can ask the price for it and most of the people will pay.