Volatile listed markets have, so the bank says, given alternative asset classes such as private equity and forms of hedge funds a chance to shine in clients' eyes.

HSBC Private Banking raised more than $1.3 billion of private client funding for alternative investments in Asia from April 2019 to April 2020 across hedge funds, private equity, private credit and $350 million in a private REIT strategy, it reported yesterday.

The group said it has offered alternative investment solutions, including: a secondary private equity strategy, a global real estate private credit fund, a European distressed debt/special situations vehicle, a private REIT, and a core diversified private equity solution. 

HSBC said it has reported “considerable inflows in the hedge fund space across a broad range of strategies, including equity long-short strategy, multi-strategy and market neutral strategy”.

The report comes at a time when financial markets, including listed equities, have been pummelled by COVID-19 although markets recovered from their March lows, aided by massive central bank money printing and expectations that the lockdowns will – as they have – ease off. However, markets may be in for a rough ride as the grim underlying economic news comes through. 

“During times of market stress, alternative investments provide a number of key portfolio benefits, including diversification and downside risk protection, and allows investors to access a broader universe of investment strategies that are less correlated with markets,” Edward Moon, regional head of alternatives, Asia-Pacific, HSBC Private Banking, said. He added that so far in 2020, the bank has raised more than $850 million in alternative investments on behalf of Asian clients.