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St James’s Place plans HK growth

The UK wealth manager aims to expand its share of the territory's mass-affluent market to 15% in the next five years, according to its Hong Kong head.
Matthew Deeprose, St James's Place

“Currently we have a 1% market share, but our only real competition among this segment is the residential property market,” said Matthew Deeprose, St James’s Place’s head of business for Hong Kong at a media briefing on Wednesday.

The UK firm, which specialises in financial planning, has about $144bn AUM, but most of its clients are based in the UK, where it has a 10-15% share of the mass-affluent market. For the past decade, it has looked to the expat market in Asia, the Middle East and southern Europe to grow its business.

“We’re looking to grow our advisory assets by at least 15% a year,” said Deeprose.

He insisted that the firm had not suffered any significant fall-out from its exposure to Neil Woodford’s funds, pointing out that St James’s Place funds were entirely segregated from the UK manager’s investment vehicles, and stock allocations only over-lapped by 15% after he moved from his original conservative mandate to selecting illiquid securities.

“We are rigorous about selecting and monitoring fund managers, and because of our size we are able to have segregated accounts which mitigates risk and gives us greater control over the investment process,” said Deeprose.

In addition to Hong Kong, where its operations are regulated by the Securities and Futures Commission, the firm has an office in Singapore, which is similar in scale and the firm has gained licences from the Monetary Authority of Singapore.

It also has a wholly foreign-owned enterprise asset management vehicle in mainland China, with small offices in Beijing, Shanghai and Shenzhen to service younger expats.

“However, our primary focus is on the largely untapped Hong Kong market, where we are targeting both locals and expats with investible assets of between $100,000 and $5m,” said Deeprose.

Its total AUM in Hong Kong is $1.06bn, with about 5,000 clients.

There are around 2.7 million individuals in the territory with investible assets in the firm’s target range, and 20% are likely to be expats, according to St James’s Place’s research.

The firm’s Asian business was boosted by the acquisition of Hong Kong-based Henley Group in 2014, which advised $528m of assets and employed 50 advisers.

St James’s Place also bought Rowan Dartington three years ago to provide a discretionary service to supplement its predominantly advisory business.

The firm is on a recruitment drive in Asia, looking for new wealth advisers “who are moving on to their second career”, said Deeprose.

An in-house “Asia Academy” will give them a nine-month, structured and intensive training, he added.

As St James’s Place’s chairman David Bellamy told FSA last month, “growing AUM is about growing distribution, and the only way to that is through our advisers, helping them to become better and attract more clients”.

Part of the Mark Allen Group.