HONG KONG — Swiss private equity firm Partners Group has opened an office in Hong Kong, the first stop for wealthy Chinese who are seeking to diversify into offshore markets.
Partners Group, one of the top private equity managers by assets, is building a team with five to 10 employees focusing on distribution in Hong Kong, said Henry Chui, head of the office in the city.
“Hong Kong is at the doorstep of China, [where] we see continued growth of GDP and developments of the economy structurally,” Chui said on Friday. “Hong Kong is a very big beneficiary as a first offshore center for mainland clients.” In addition, efforts to court rich Middle Easterners to open family offices in the city also make Hong Kong a good base for attracting global capital, he continued.
The Zug-headquartered firm’s move into Hong Kong comes as the city, Singapore and Switzerland vie to scoop up Chinese cash. The slowdown in the world’s No. 2 economy and its ongoing property crisis are driving wealthy Chinese to diversify where they can.
Nikkei Asia reported this week that tighter scrutiny of Chinese wealth in Singapore due to a major money laundering bust is driving some to set up family offices in Hong Kong as a temporary solution.
Chui, a Hong Kong local who relocated to Singapore two years ago, has moved back for the opening of the new office with his family in tow.
UBS Chief Executive Sergio Ermotti presented a slide during a speech in Lucerne this week that predicted Hong Kong would overtake Switzerland in wealth management in 2027, with the sector in the city expecting a compound annual growth rate of 7.6%, the Financial Times reported.
Speaking to local media on the sidelines of a news conference, Chui acknowledged Ermotti’s forecast that Hong Kong will overtake Partners Group’s home market, but he did not give a time line like the UBS chief.
Other top global private groups such as Switzerland’s EQT and U.S.-based KKR have also been building their Asia private wealth teams in recent years. A major driver is what they see as rich Asians’ under-allocation of wealth into private equity versus institutions like pension funds.
Globally, Partners Group’s Chui said 30% of the limited partners, who give money for managers to invest, come from private wealth.
In Singapore, home to its regional office, Partners Group has over 300 employees. The group says it has eight to 10 people for research in China. Overall, it has invested over $6 billion in the greater China region.
When asked by Nikkei Asia if there are any plans to increase staffing in the mainland office, Chui said, “We are comfortable with the number for now.” He said Partners Group is “opportunistically” looking at expansion possibilities, which include applying for onshore quotas for wealthy individuals to invest offshore, and a private fund management license.
