Wealth management

Lufax’s international unit eyes Asia-Pacific expansion, 10,000 customers in a year

  • Lu International is Lufax’s first international arm and was set up under China’s Belt and Road Initiative
  • Company to add private equity, ETFs to its product offering soon
PUBLISHED : Thursday, 06 December, 2018, 10:01am
UPDATED : Thursday, 06 December, 2018, 11:49pm

Lu International, the Singapore unit viewed as crucial to the global ambitions of Chinese online wealth management giant Lufax, aims to expand in Asia-Pacific and grow to 10,000 customers in about a year, with private equity and exchange-traded funds to be added to its product offering soon, according to its chief executive.

The company was set up in Singapore in 2017 as Lufax’s first international arm. Lufax said back then it marked the first time a Chinese financial technology company had set up its international head office in Singapore under China’s Belt and Road Initiative. Singapore is viewed as a key hinge of the initiative.

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Lu International operates the mobile wealth management platform Lu-Global.com, which mainly targets middle-class retail investors in Asia-Pacific, including Chinese investors that have offshore accounts.

It is of late also targeting corporate clients, one of them being OCBC Bank, providing them with access to the platform’s investment products, according to Kit Wong, Lu International’s Singapore-based CEO.

“We hope to reach 10,000 customers in the next year or so,” Wong said in a phone interview. “We have about 32 different nationalities on the platform currently. It’s mostly tilted towards North Asia, mainly because of the brand familiarity given our affiliation with Ping An Group and Lufax,” he said. “Due to our presence here in Singapore, we are also seeing investors from Southeast Asia grow.

“In fact, we want investment to grow all over Asia-Pacific.”

To do so, Wong said, the company was trying to make its mobile app easier to use. The app allows customers to open accounts and conduct investments remotely. The company will also expand its product offering to longer-term investments, such as private equity, which usually has holding periods of five to seven years. Currently the app offers units trusts, yield instruments and structured notes.

“We have seen demand growing in alternative investing in the current market environment,” he said.

The demand for private equity investment tends to increase when the public equity market is volatile, as investors diversify their portfolios to help offset this volatility.

We want investment to grow all over Asia-Pacific
Kit Wong, CEO, Lu International

Wong said the company aimed to launch its private equity products on the app in the first half of 2019. He said Lu International was also exploring the introduction of ETFs on the platform, potentially in early 2019. The company is also on track to introduce a robo-advisory service by the middle of next year.

Lu International is the first step in Lufax’s internationalisation, Gregory Gibb, the Lufax CEO, said at the launch of Lu International last year. Lufax picked Singapore for the set up of Lu International because the Lion City has a more welcoming regulatory environment for its product model.

Lufax, set up by Ping An Insurance in Shanghai in 2011, is China’s largest online wealth management platform. It had 36.8 million registered users and 385 billion yuan in assets under management by the end of June, according to the company.

Wong said Lu International had received support from parent company Lufax and Ping An Group mainly in terms of technology, financial investment strategies and customer investment behaviour. For example, it uses facial recognition to verify customers’ identities during the account opening and account detail changing processes, which is borrowed from Ping An Technology.