Monday, 28 November 2022

Endowus acquires Carret Private in Hong Kong to become one of the largest independent wealth managers in Asia

5 min read

Singapore & Hong Kong, 17 Oct 2022 – Endowus, Asia’s leading digital wealth advisory platform, today announced that it has completed its acquisition of a majority stake in Carret Private Investments Limited (“Carret Private”), a leading Hong Kong-based wealth manager and multi-family office that serves ultra-high-net-worth individuals, families, trusts and charitable organisations. Endowus was established in Singapore as the first, and now the largest independent digital wealth advisor to span both private wealth (cash) and public pension savings (Central Provident Fund & Supplementary Retirement Scheme). 

Endowus recently announced its Hong Kong expansion plans, key management hires, and licensing by the Securities and Futures Commission of Hong Kong (SFC). This acquisition furthers its commitment to bring professional independent advisory services and investment solutions to the private wealth market in Hong Kong and Singapore, which together represent over 90% of cross-border wealth in Asia. Endowus will be the first digital wealth service in Hong Kong to launch 100% trailer fee cashback to its clients, doubling down on its mission to make investing more affordable for everyone. It will be a launchpad to overcome the industry pain points of high cost and misaligned incentives that often lead to poor investment advice and outcomes for clients.  

Strategic significance of the acquisition 

Endowus’ acquisition of Carret Private signals its accelerating entry and commitment to serve the needs of Hong Kong investors, and its greater ambition to serve the regional wealth markets. With this acquisition, the Endowus group of companies will now vertically integrate to serve the needs of different client segments, and to provide superior investment and advisory solutions as one of Asia’s largest independent wealth advisors across both digital and offline players. The combined Endowus Group client assets surpassed US$4 billion, as of end-H1 2022.  

The Endowus Group, through Carret Private’s minority shareholding, will also have a strategic partnership with Singapore-based Lumen Capital Investors (“Lumen”). Lumen is an MAS-licensed, Singapore-based wealth advisor and multi-family office that is founded and led by Wilfried Kofmehl, a private banking veteran with 30 years of experience with global institutions such as UBS. Kofmehl is also the former CEO of Bank Julius Baer Singapore.

Samuel Rhee, Chairman & Chief Investment Officer of Endowus said, “We are excited to announce the coming together of Endowus and Carret Private, two companies wholly focused on serving our clients as trusted independent wealth advisors. Endowus brings strength in technology and innovative WealthTech solutions that complement the deep trusted relationships Carret Private has built with its broad client base in Asia. Endowus is doubling down on the wealth business. The combination of Endowus, Carret Private and the partnership with Lumen will allow us to scale and grow faster, and lead the industry towards greater transparency and integrity in providing the highest quality wealth advisory services as fiduciaries and the lowest cost access to solutions that help our clients achieve better outcomes.” Rhee is an industry veteran with more than 28 years of experience in the wealth management industry. He was previously the Chief Executive Officer and Chief Investment Officer for Morgan Stanley Investment Management in Asia. 

Awarded “Best Independent Wealth Manager – Asia Pacific”; “Best Independent Wealth Manager – Discretionary Portfolio Management” by Asian Private Banker in 2021, and “Best Overall External Asset Manager in Asia” at the WealthBriefingAsia Awards 2022, Carret Private brings deep experience servicing complex wealth needs of multi-generational families and entrepreneurs across Greater China and Asia.  

Kenneth Ho, Managing Partner of Carret Private, is an industry veteran with over 25 years of experience in investment banking and private banking. He is recognised as one of the pioneers of wealth management’s open-architecture business model. Prior to setting up Carret Private, Kenneth was an integral member of Julius Baer’s core regional executive management team in establishing its Asian franchise in 2006 and grew the business from infancy to one of the top private banks in Asia. He had held various leadership positions at Julius Baer, including Deputy Global Head of Investment Solutions Group and a member of the Asia Executive Board and Global Investment Committee. Prior to Julius Baer, Kenneth was on Credit Suisse’s regional executive committee. In 2020, Kenneth was recognised by WealthBriefingAsia as the “Outstanding Individual in Private Banking”. 

Ho said, “This acquisition comes at the perfect time as the region experiences a substantial growth in independent wealth management. At a time when larger private banks are consolidating their bottom lines, clients are now more than ever, demanding unbiased, independent and transparent wealth advice. This acquisition will help Carret Private to meet the three key trends in our industry of meeting the digital demands of our clients; creating more transparent, fee driven businesses, and helping us to expand into the private markets asset class. We are excited for Endowus to be the engine in addressing these client needs and seizing growth opportunities for the group.”

Expanding investment solutions to meet demands of private wealth segment 

As part of the expansion of solutions and services to a broader range of asset classes and client base, Endowus recently announced the introduction of new private market and alternative solutions. Working in collaboration with leading industry players including Apollo, Blackstone, Bridgewater, Hamilton Lane, KKR, Millennium, Partners Group, and Quantedge, these partnerships will enable an expanded product offering to be made available to its accredited and professional investor base, through access to global leading private equity, hedge funds and alternative investments. Endowus is also working with the likes of Allfunds, Antarctica and iCapital to offer best-in-class solutions and experiences for private markets.  

Endowus Fund Smart, which facilitates access to institutional funds and provides 100% trailer fee cashback, has also relaunched with a suite of new features including the ability to invest in foreign currency domiciled funds; a seamless currency converter, and a refreshed navigation access for accredited investors and alternative fund products. Fund Smart remains the lowest cost platform to access exclusive single funds and strategies across all client segments including retail and accredited investors, as well as high-net-worth-individuals. This access will now extend to external asset managers such as Carret Private and Lumen.  

Gregory Van, CEO of Endowus said, “We are here to advance the human wealth experience through technology, bringing the right level of personalisation and automation to make expert investing better for all of us. This mission transcends online and offline, and touches everyone, from those at the beginning of their wealth journey to the ultra-wealthy. Together, Endowus and Carret Private have the ingredients and ambition to define the future of wealth management in Asia and to proliferate the rapid growth of independent wealth advisory services.” Prior to co-founding Endowus, Van was an early employee of Grab and was instrumental in building the Fintech platforms including its payment systems. Before Grab, he had assumed a role in UBS’ private funds group.  

Timely acquisition leading advancement in the wealth industry

Continuing to operate under the individual Endowus and Carret Private brands, the group’s expertise in technology, talent, systematic wealth advice, and institutional investing across the public and private markets, as well as alternatives are complementary to each other. And when combined with an outstanding offline and online client experience will allow both firms to holistically cater to the wealth needs of clients across the demographic spectrum. 

The acquisition comes at a time when the independent wealth management and external asset management industry is beginning to burgeon in Asia, as it has in Europe, the US and Australia over the last few decades. More clients are seeking independent, objective, and transparent advice, where advisors are not tied to a bank or asset manager. In Switzerland, boutique independent wealth managers are estimated to manage 30% of all wealth assets, while in Asia this number is closer to 5% with a lot of room for growth and consolidation (Hubbis). 

At the same time, the digital wealth industry has seen an astronomical growth in Asia in the last few years. According toStatista, WealthTech firms in the region hold more than US$200 billion in AUM, a 5X jump from just four years ago. As quoted in the Endowus-KPMG WealthTech: Looking Ahead report, Asia’s WealthTech venture funding hit more than US$2.2 billion in 2021, a two-fold increase as compared to US$1.1 billion in 2017. For wealth management in Asia-Pacific as a whole, PwC projects AUM to reach US$29.6 trillion by 2025, nearly doubling the levels seen in 2017, with a generational shift that means new clients will demand aligned advice, more transparency, and a seamless and exceptional digital experience in their wealth advisory services. 

 

Re-disseminated by The Asian Banker

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