Morgan Stanley taps China’s rich looking to set up family offices in Singapore

Vincent Chui Photographer: Ore Huiying/Bloomberg

Morgan Stanley, the world’s second-largest wealth manager, is beefing up its services for rich clients in Singapore with a focus on Chinese entrepreneurs looking to set up family offices in the city state.

“The city is a key business hub for China entrepreneurs, as well as a family office nexus,” Vincent Chui, who heads the bank’s Asia wealth operations, said in an interview. The U.S. bank hired Wee Yee Yeong to head its Singapore wealth business this year, and plans to add relationship managers there and in Hong Kong, he said.

Morgan Stanley’s focus underscores the significance of the family office industry in the Southeast Asia nation, where the number of dedicated firms to manage personal wealth of tycoons and their relatives quadrupled from 2015 to 2017, official data show. Chinese millionaires are increasingly looking to set up offshore structures to protect their fortunes from the mainland’s newly toughened tax regime.

Clients tend to prefer Singapore as a base for family offices “a little bit more” than Hong Kong, where the wealthy operate more on an individual basis, Chui said Friday in a separate Bloomberg Television interview. Still, the bank looks at both markets for wealthy Chinese “as one,” he said.

Chui said Morgan Stanley can provide services to business owners who are made wealthier following initial public offerings managed by the bank.

“We would like to position ourselves as a firm-wide partner to our customers,” he said. When an entrepreneur looks to do an IPO, the company will bring in bankers from both the investment banking and wealth sides to help the client figure out how the listing would affect their finances and family needs, he said.

In 2018, Morgan Stanley led more than 20 offshore IPOs for Chinese private companies. Among major Chinese share sales that Morgan Stanley helped manage in Hong Kong last year are Xiaomi Corp.’s $5.4 billion IPO and Tencent Holdings Ltd.’s additional offering.

Record Profit

Morgan Stanley reaped record pretax profit of $4.5 billion from wealth management last year, a results presentation by Chief Executive Officer James Gorman showed Thursday.

Wee joined Morgan Stanley from Bank of Singapore, where he was a senior executive focusing on Greater China and family offices, Chui said. The U.S. firm plans to hire 50 relationship managers for both Hong Kong and Singapore over the next three years, bringing the regional headcount to around 150, he said.

On top of this, it’s seeking to recruit investment counselors, wealth planners and specialists for capital-market access and financing in the cities, according to Chui. A recent pause in a hiring spree at Asian private banks has given the firm a chance to find talent, he said.

Private banks from UBS Group AG to Credit Suisse Group AG offer services to family offices of the wealthy by advising them on investments and helping to finance their transactions. Some also give advice on succession planning and philanthropy.

Morgan Stanley managed $2.2 trillion of assets in 2017, second only to UBS, according to London-based Scorpio Partnership. In Asia, it ranked seventh.

Bloomberg