The Singapore-based firm received a capital markets services licence from the Monetary Authority of Singapore in late-December, according to Anson Sng, Raintree’s CEO and chief investment officer.
The licence will enable the bank to manage assets on behalf of accredited investors in the Lion City.
Sng was previously Bank of Singapore’s head of discretionary portfolio management (DPM) for 11 years, where he oversaw a team managing $8bn in assets. He left the bank in July last year to start Raintree along with other bankers, which Sng declined to name.
Raintree is an independent asset manager that aims to manage client money individually on a DPM basis rather than in a co-mingled vehicle, which is what fund managers do, according to Sng.
As an IAM, Raintree is permitted to manage a client’s accounts that are held in different banks and consolidate them in one portfolio, he explained.
“I decided to leave the bank because what I saw was opportunity-driven,” Sng told FSA in a recent interview.
“[When I was with BOS], clients were asking if I can also manage their other accounts in other banks. But I could not do that when I was with BOS. The only way was to leave the bank and do this on a stand-alone, independent basis,” he said.
The IAM business is slowly growing in Asia, according to a report from executive search firm Selby Jennings. As of the end of 2017, Hong Kong and Singapore had around 160 IAMs, which collectively manage nearly $100bn in private wealth.
While declining to give exact staff size, Sng said Raintree now has a team consisting of professionals dedicated to portfolio management and operations.
According to the firm’s website, the team consists of chief operating officer Lee Hsiao Yen and executive director Joseph Oh, both of whom were also formerly at BOS. Lee spearheaded the bank’s advisory portfolio management team’s middle office function, while Oh was BOS’ fixed income portfolio manager on the DPM team.
Raintree plans to hire more people this year, especially for IT, according to Sng.
“IT people are important for IAMs because they would need to amalgamate data from different banks and manage them together,” he said.
After receiving its licence from the regulator, the firm is now in the process of onboarding clients. Raintree’s clients are ultra high net worth individuals who make a minimum investment of $10m, according to Sng.
Not competing against banks
Unlike other wealth managers or multi-family offices that position themselves as a “one-stop-shop”, Raintree will only focus on investment management, according to Sng.
“Our key positioning is only in investment management, in which we manage global multi-asset portfolios for our clients, with a focus on emerging markets,” he said.
“We are essentially an asset allocator, in which we can use various mutual fund products and ETFs. Because we have expertise in emerging markets, we can buy single line securities.”
Because Raintree’s business is just investment management, Sng believes that IAMs, in general, do not compete directly against other private banks and wealth managers.
“We are not trying to do everything. For our clients, who will need legacy or wealth planning, what we will do is refer them directly to other firms.”
In fact, some of a private bank’s revenues are derived from back office services provided to IAMs. The independent firm may partner with a private bank for specific services, such as custodial or execution of investments.
UBP is an example of a bank that is taking advantage of the growing IAM business in Asia. In 2018, the bank said that it was looking for partnerships with new IAMs.