Understanding the Bär necessities

More than 26 years' experience give Kaven Leung the skills to pull off a merger that doubles Julius Bär's wealth management work in Hong Kong

PUBLISHED : Saturday, 15 June, 2013, 12:00am
UPDATED : Saturday, 15 June, 2013, 3:29am

Veteran banker Kaven Leung joined the Swiss private banking group Julius Bär as its chief executive for North Asia in October last year.

Before Bär he worked for Citigroup and Goldman Sachs, and he has worked in the private banking sector in Asia for more than 26 years.

Leung holds a master's degree in business administration and finance, and a bachelor of science degree in economics and business administration, and has completed an advanced management programme at Harvard University.

He is now playing a key role in the integration of Julius Bär's Hong Kong and Singapore businesses with Bank of America's non-US Merrill Lynch wealth management business, which it acquired last year. The operation in Hong Kong is now integrating with the operations of Merrill Lynch wealth management in the city, an organisation equal in size to Bär's existing operations in Hong Kong.

After the integration, about a quarter of Julius Bär's total assets will be managed in Asia, making it one of the top five international wealth managers in the region.

Leung talked to the South China Morning Post about how to be a leader in an industry which attracts many high-powered people; and how he manages a company which is going through a challenging merger process.

What is the biggest challenge in the merging of the two businesses and what will you expect from the process?

The biggest potential and benefit of the acquisition lies with the access to a significant pool of talent and professionals who are strongly needed in our industry to serve clients' complex wealth management needs.

Both Julius Bär and Merrill Lynch are considerable in size and we have to do a lot to the operations and technologies to achieve a smooth combination. We also have to take care of the "soft issues". At Julius Bär, we have always put priority on human capital - creating a new DNA for the combined group.

Julius Bär is a young company in Asia but has nearly 125 years of history in Europe. We have been in Asia for about seven years, while most of the staff from Merrill Lynch have worked in their company for 20 to 30 years.

They are experienced and know the Asia markets well. This strong group of professionals and their connections with their clients will add tremendous value to our business.

Asia is our second home market and we are optimistic about the growth of wealth in the region. Wealth creation will lead to growing demand for private banking, and we estimate incomes in Hong Kong, China, Indonesia, and the Philippines will grow at a double-digit rate over the next three to five years.


How can you ensure the successful management of the wealth of successful clients?

I have been in the industry for over 25 years and have witnessed many market cycles. To be a success in managing the wealth of successful clients, you need to have experience, the right value proposition, and a client-servicing approach. When opportunity arises, it takes good judgment to assess the situation in order to properly seize the opportunity.

When you have experienced a number of cycles, you accumulate wisdom and knowledge. You become more seasoned in balancing risks with reward potential and are better able to advise clients to do the right thing. It's a long-term relationship game, after all.

Additionally, our bank focuses purely on private banking business. We do not "manufacture" our own products or have any other banking business lines. This helps to reduce conflict of interest, and our open architecture platform helps clients to access and source from the best of the breed at competitive terms.


How would you describe your management style?

It is important that the team is aligned with the value proposition and philosophy of the organisation. Against this backdrop, I respect the diversity of different people. Every person has his or her own wisdom and value that can enrich the team's overall strengths and performance.

It is important that we don't just motivate good performers with financial rewards. We should also take note of non-financial incentives, such as personal growth and career development. As a manager I gained a lot over the years seeing my colleagues grow and expand to their potential.

For those who need help in performance, we provide coaching and support to help build confidence for them to learn and be able to stretch to achieve. We need to care for our people and it is the most rewarding experience to build and develop talent by working closely with them.


What affluent segments are you looking to serve?

Many affluent people think family planning advisory services are important, and many will consider taking on wealth succession plans.

On the investment front, many assets were being discounted in recent years owing to the financial crisis. For instance, after the sovereign bonds crisis in Europe, a lot of assets became available at relatively low prices.

Asian investors are also interested in finding business partners, brand names, and properties. Some wish to buy castles and wineries.

On the other hand, some European families also seek opportunities to invest in Asia, as they believe growth here will be more robust than in the West. The investment flows are in a two-way direction.


What is your opinion about the regulatory requirements set by the Hong Kong Monetary Authority for the private banking sector?

I believe the authority is moving in the right direction to enhance transparency and protection of general investors. It will be a good thing for the market when we can raise confidence as a whole.

Active engagement with market participants will always help to sharpen the focus and address issues accurately such as differentiating approaches towards private banking and the retail segment. The difference in the two types of customers does not lie only in the amount of assets they hold; other elements, such as investment experience, could be also included.


What do you do to relax?

I am a workaholic and enjoy working! But in recent years, drawing has become one of my hobbies. I did not attend formal classes but I am interested in reading related books and going to art exhibitions. People are always willing to know more of a thing if they find it interesting.