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Singapore private bankers find love for China’s “hotpot king”

Singapore has a new richest person, and he’s originally from China. Zhang Yong, whose company Haidilao runs a chain of hotpot restaurants employing about 60,000 people across Asia, is now a naturalised Singaporean citizen, and he’s debuted on Forbes’ new Singaporean rich list at number one, with a net worth of US$13.8bn on the back of an IPO last year.

Zhang, widely known as the ‘hotpot king’, is not the only mainland-born tycoon who’s taken on Singaporean citizenship. Forrest Li, founder of tech unicorn Sea, is now also on the same rich list after seeing his wealth more than double to US$1.57bn year-on-year.

While Li and Zhang are obviously extreme examples, they are part of a wider and growing cohort of mainland Chinese millionaires and billionaires who have become permanent residents or citizens of Singapore. The city state is emerging as an alternative destination to Hong Kong for wealthy Chinese who want to live offshore, a trend which could potentially be exacerbated if the recent civil unrest in Hong Kong continues for months to come.

This is good news for relationship managers in Singapore, including those at family offices and those working in the family-office units of large private banks, say headhunters.

Vincent Chui, Morgan Stanley’s head of wealth management in Asia, speaking to Bloomberg earlier this year, noted an increase in wealthy Chinese entrepreneurs setting up offshore family offices, particularly in Singapore. His firm, along with others which service family offices, such as UBS and Credit Suisse, is looking to take advantage.

“Morgan Stanley will definitely be looking for RMs with a good network of Singapore-domiciled Chinese clients, or Chinese clients with the potential to set up family offices here,” says Lucas Yeo, head of banking and finance at recruiters Tangspac in Singapore.

However, while the unrest in Hong Kong may have given Chinese millionaires and billionaires an extra incentive to launch family offices in Singapore, it’s not the main driver. “This is a trend that’s been ongoing for about two years, mainly because the encouraging regulatory and tax regimes in Singapore make it conducive for Chinese clients,” says Gagan Mehrotra, a private banker who left Standard Chartered in January to manage his fintech firm.

Private banks in Singapore are also recruiting more RMs for their North Asia desks, Liu San Li, a former private banker, now a business partner at wealth management firm Avallis, told us previously.  “The hiring started slowly in 2014 with firms like UBS, Credit Suisse and Bank of Singapore having two to four China RMs in Singapore,” he says. “In 2016, more banks – DBS, HSBC, Stan Chart and Julius Baer – joined the game. And now almost all private banks are aggressively hiring China RMs in Singapore.”

Private banks in Singapore are increasingly going after Chinese clients and the wealth they hold outside of the mainland, adds former Merrill Lynch private banker Rahul Sen, now a global leader in private wealth management at search firm Boyden. Banks are helping them not just with international investments, but also with real-estate and succession planning.

This is leading to a merry-go-round of China coverage bankers. As we reported in January, for example, Julius Baer in Singapore hired China specialist Kelvin Liu, who previously covered China as a Credit Suisse RM.

Singapore isn’t likely to displace Hong Kong as the top offshore location for rich Chinese anytime soon, however. Mainland private banking clients haven’t yet started shifting assets to Singapore in sizeable enough numbers, says Liu from Avallis.

Image credit: yanmiao, Getty

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AUTHORSimon Mortlock Content Manager

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