Beijing-based fintech company-turned-wealth manager - CreditEase Wealth Management - is counting on three pillars to grow its high-net-worth (HNW) business: investment capabilities, technology and going global.
Speaking to Citywire Asia, founder and CEO Ning Tang, said the firm is differentiating itself from local competitors by pitching strong portfolio construction and asset allocation principles to its HNW client base.
‘The China market is going through profound change. Earlier it was all about high yield, fixed income, government-guaranteed type of investment opportunities,’ he said. ‘Going forward, no longer will this be the case. The equity part will become bigger and bigger in the portfolio.’
CreditEase has over 40 offices in mainland China with 3,000 financial planners covering tier 1, 2 and 3 cities servicing investors with over $1 million in investable assets.
Tang wants clients to diversify away from their traditional fixed income and property investments towards venture capital, private equity, hedge funds and real estate investment trusts.
To improve investor education, CreditEase carries out investor study tours every year, recently sending a delegation to Omaha for Warren Buffett’s shareholder meeting, revealed the executive.
‘We see clearly the trend from fixed income to equity, from short term speculation to long term investing, from single product to asset allocation,’ Tang said.
To this end, the $15 billion wealth manager has partnered with asset management and private equity firms, such as Blackstone, KKR, IDG, Renaissance and Wellington, for its fund-of funds offerings.
It signed a cooperation agreement with Amundi Asset Management in March, becoming the French fund house’s first wealth management partner in China.
CreditEase currently offers six fund-of-funds solutions to clients that provide exposure to private equity deals, listed equities as well as real estate, among other asset classes.
Tang said he prefers fund-of-funds over single funds for better diversification and risk management in client portfolios.
The executive is now on the lookout to partner with fintech start-ups for CreditEase’s Fintech Investment fund as well trust companies for the wealth planning business.
The Fintech Investment fund, a venture fund founded in 2015, has mostly invested in Chinese and American companies, such as Trumid, WeConvene and WorldCover, but recently made a couple of investments in Southeast Asia and Africa, said Tang.
The fund invests in five sub-segments of technology: lending, payment, personal finance/wealth management, enterprise solutions and insurance.
In terms of harnessing fintech to improve his own business, the founder said that he is aware that an ‘online-offline combination model’ is necessary for success.
Currently, CreditEase clients receive information on their portfolios, products, news and market intelligence through a mobile application. Moreover, a couple of years ago, the firm introduced an app that helps Tang broadcast to and interact with the all 3,000 financial planners.
Fintech is also a part of the firm’s global expansion plans as well. Tang said that the firm is hiring from Wall Street and Silicon Valley to beef up its fintech investment team as it looks to expand its global presence beyond its international offices in Singapore, Hong Kong, New York and Tel Aviv.
While it currently has investment teams targeting rich Chinese investors in San Francisco, Los Angeles, Vancouver and Toronto, Tang wants to begin providing wealth management services to these locations by hiring financial planners.
‘The idea is that when Chinese high net worth have foreign assets, dollars for us to help with, we offer them all kinds of products and services,’ Tang concluded.