Hong Kong's asset management and private banking business has become a battlefield, prompting some long-time contenders to raise the white flag while others soldier on in the belief that superior tactics will help them prevail. Meanwhile, boutique newcomers continue to jump on the bandwagon, hoping to hitch a ride on the great Asian boom.
'It's not just Hong Kong. It's the Asian market which is growing much faster than Europe - which will probably stop growing this year; so the dynamics are over here,' said Geert De Bruyne, chief executive of fund manager Banque Degroof Luxembourg.
In recent years, private banks such as Banque Degroof, BSI and Clariden Leu have been fighting for a foothold in the region.
Banque Degroof Luxembourg, a subsidiary of Banque Degroof, the largest independently held private and investment bank in Belgium with a 141-year history, opened a Hong Kong representative office in November.
Rather than focusing on rich individuals, it targets the institutions that service these individuals.
'Fees,' said Marc-Andre Bechet, head of the investment funds department at Banque Degroof Luxembourg, 'are not the way to compete in the market.' The bank will therefore focus on niche clients, servicing asset managers and funds sized between US$50 million and US$200 million.
'We service clients that perhaps might be too small for big players,' said Bechet. 'A lot of the big players think that managers of assets that are below US$100 million are not even worth looking at ... but someone needs to help smaller asset managers to grow.'