We talk to a business arm of Pictet about how it complements what the venerable Swiss private bank does, with a particular focus on Singapore and Hong Kong.

The asset servicing group at Switzerland-headquartered Pictet takes its enterprise around the world when it comes to hubs such as Singapore and Hong Kong.

The Pictet Asset Services (PAS) business concentrates much of its energy on areas such as Asia’s multi-family offices along with bodies such as global asset managers, pension funds, endowment funds and other institutional investors. This line of activity generates important revenues for Pictet. With family offices being an expanding area, for example, the revenue opportunities are obvious.

“We are pretty optimistic about the growth on the asset servicing side, not just Asia, but across the regions, for different catalysts and reasons,” Amy Lau (main picture), market head for Asia at PAS, told WealthBriefingAsia in a recent interview in Singapore. “We are positive on Asia, because we believe that there will be new wealth that continues to channel into Asia. I think Hong Kong and Singapore will continue to be the two major financial hubs in Asia and, with global diversification initiatives of multi-family offices and global asset managers, I think these two geographies are definitely part of their priorities when they are considering to diversify. We're definitely growing, and we will adapt to the required resources accordingly.”

Without giving a specific number, Lau said that the PAS contribution to Pictet’s overall business is "important.” In headcount terms, PAS has 243 staff; the size of the Asia group within it is still small, at five. For context, across the entire Pictet group, it has SFr724 billion ($892.4 billion) billion in assets under management or custody (as of 31 March); with a total capital ratio (as of end-December 2024) of 24.5 per cent, and more than 5,500 full-time equivalent employees. (Source: Annual Report, 2024.) Pictet Asset Services globally has SFr662 billion in assets under custody. 

Sven Holstenson is the managing partner responsible for PAS, and Marc Briol is its CEO.

“We represent servicing the ecosystem of multi-family offices, asset managers, also endowments and pensions, for example. And these are institutional clients that are looking for [an] institutional setup and institutional servicing. So from a business to business segment, we definitely have a very key and strategic position within the group," Lau said. 

The PAS business is an example of how banks have built B2B revenues with intermediary institutions of various kinds as well as with private clients. It adds a new revenue source and diversifies sources of earnings – important considerations in volatile times. (Note: PAS does not operate an external asset managers desk in Asia but in other regions.)

Sophistication
This is a busy, competitive marketplace, Lau said: “Institutional clients in Asia are increasingly sophisticated, demanding high-quality, cost-effective, and innovative services. Asset servicing firms must continuously evolve to meet these expectations.”

The asset services business provides solutions such as custody, fund administration, fund governance, and trading solutions. It also has a bespoke end-to-end global custodian offering. On the investment funds' side, its turnkey solutions include setting up private label funds, along with those domiciled in Luxembourg, the Cayman Islands and British Virgin Islands. And the advent in 2020 of Singapore’s Variable Capital Companies (VCCs) system has added to demands for services.

The VCC model is popular, Lau said. “There are managers in Asia looking to set up funds, and they would consider a Singapore VCC. We also see that international managers that want to diversify their assets into this part of the world consider a VCC as well. For our particular solution, it really holds strong appeal for clients with an international footprint, both locally and internationally,” she said. One of the benefits of the VCC structure, as envisaged by Singapore’s regulator, is the tax incentive for those that are qualified.

Luxembourg-based funds, such as UCTITs structures, are “relevant to us,” Lau said. (Other entities associated with Luxembourg include the Specialised Investment Fund (SIF) and Reserved Alternative Investment Fund (RAIF) structures.)

Lau elaborated: “And this is where we really aim to provide what we call a one-stop-shop solution, which is really to help build out the ecosystem for our clients. The white labelling solution would be one of the turnkey solutions where we come in with a segregated portfolio company structure that clients can plug and play with a sub fund into our structure, where the infrastructure is built already.”

“So you have your custodian, your fund administration, your fund governance like your management company, your alternative investment fund manager, and your trading solutions. This way, it's very attractive to a lot of the Asian clients who already might have a local structure, but want to establish a footprint into continental Europe or Switzerland,” she said.  

Part of the proposition is giving PAS clients access to the bank’s trading and sales execution capabilities through a single point of entry, and this covers asset classes including bonds, equities, forex, derivatives and funds.

This work has been going on in Asia since 2005, when PAS started to serve global custody and institutional clients in the region. This activity sits alongside operations in Switzerland, continental Europe and the UK.

One way that Pictet can stand apart from the rest is stressing a track record that dates back more than 220 years. “Our long-term stability allows us to retain and nurture industry talent which, in our view, is critical. [This is about] stability and integrity with low staff turnover,” Lau said.

Tools and tech
AI and other forms of technology affect the value chain of wealth management, and that includes a business model such as PAS. 

“Major impacts [from tech] that come to mind include Gen AI and the increased operational efficiency we can draw from this as well as improved client engagement and servicing,” Lau said. 

But for all the razzmatazz around AI, Lau stressed that the PAS business is one that requires the human element. 

“We believe the human touch is still very relevant, we do believe that properly leveraging AI and technology will lead to efficiency and productivity gains,” she said. 

“For improved client engagement, we have the following approach with technology: Providing proprietary tools, where we develop in-house solutions to meet our clients’ needs, but also control the value chain and data (one example is Pictet Connect), and being able to interface with market tools (PMS, FIX) , so it can seamlessly integrate into their systems. At the moment, it can work with 20 portfolio management systems," she said.

Unfortunately, the technogy brings threats that have to be managed, such as cybersecurity issues, Lau said. As a result, cyber safety and generative AI are important themes in the Pictet group’s 2030 vision, she said. 

WBA asked Lau what markets the Pictet business concentrates on in Asia.

“For us, we largely focus on Hong Kong and Singapore. These are really the two main Asian financial hubs where our clients and potentially the investors are going to be part of it. Unlike the EU, each country in Asia has its own market dynamics, investor base and regulations, it's going to be more difficult to replicate the European passport model.”