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SINGAPORE (BLOOMBERG) – Asia’s wealthy are preparing cash to seize opportunities in financial markets and private equity once the impact of the coronavirus pandemic subsides, according to the head of private banking for Southeast Asia’s largest lender.
Clients have increased cash holdings to about 40 percent of their portfolios in recent months, up from 30 percent before the pandemic, said Joseph Poon, who runs the private bank of DBS Group Holdings, in an interview this morning. week. While the unit does not disclose assets under management, it is part of DBS’s broader wealth platform of $ 251 billion, which is among the largest in Asia.
“Customers have a lot more cash than usual. It’s a very interesting phenomenon,” Mr. Poon said. “Clients with ultra-high net worth believe that there will be a good opportunity in the market once the impacts of the pandemic have passed through the economy,” he said, referring to those with at least S $ 30 million in investable assets.
Clients are considering financial asset, e-commerce and logistics businesses with funding gaps. Some plan to use the cash for their own business needs and may use it to expand businesses through partners, she said.
Poon’s ideas reflect a broader trend. Major private equity firms have about $ 1.6 trillion (Singapore $ 2.18 trillion) in dry powder, according to data compiled by Bloomberg, after the coronavirus halted private equity deals and rocked global markets. . Still, holding onto cash may mean that some investors have already missed a massive market rally, with the MSCI AC Asia Pacific Index rising about 43 percent from its March low.
GROWING ASSETS
New asset inflows, or net new money, into DBS Private Bank and another of its equity businesses more than doubled to $ 5 billion in the first half, Poon said. The funds come from a variety of destinations, including family offices in the United States, Europe and other places that see Singapore as “a strong jurisdiction,” he said.
The private bank, which accepts clients with at least $ 5 million in investable assets, is part of DBS’s broader wealth platform, whose assets grew 7 percent at the end of June from a year earlier. DBS expects AUM to grow at a similar rate this year, Poon said.
Elsewhere in the region, DBS is on track to double equity assets in its Thai brokerage unit to $ 8 billion by 2023. The bank is also looking to expand in the Philippines, where it currently has only one representative office, Poon said. , without giving more details.
“We started some discussions last year and we are still in the middle of structuring how best to take advantage of the growing investment appetite of high-net-worth individuals on land,” Poon said. “Still, it’s the early days.”
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