Rich Asians are hanging onto investment funds until coronavirus pandemic ends, DBS expert says

Clients have increased cash holdings to about 40 per cent of their portfolios in recent months, up from about 30 per cent before the pandemic, Joseph Poon, who leads DBS Group Holdings’ private bank, said in an interview this week. While the unit doesn’t disclose assets under management, it’s part of DBS’s S$251 billion (US$184 billion) wider wealth platform, which is among the largest in Asia.

“Clients are holding a lot more cash than usual. It’s a very interesting phenomenon,” Poon said. “Ultra-high-net-worth clients believe there will be a good opportunity in the marketplace once the pandemic impacts have flown through the economy,” he said, referring to those with at least S$30 million in investable assets.

Clients are considering financial assets, e-commerce and logistics businesses with funding gaps. Some plan to use the cash for their own business needs and may use it to expand companies through partners, he said.

Poon’s insights mirror a wider trend. Leading private equity firms are sitting on about US$1.6 trillion of dry powder, according to data compiled by Bloomberg, after the coronavirus halted private equity deals and roiled global markets. Still, holding on to cash may mean that some investors have already missed a massive market rally, with the MSCI AC Asia-Pacific Index surging about 43 per cent since its March low.

New assets inflows – or net new money – at DBS Private Bank and another one of its wealth businesses more than doubled to S$5 billion in the first half, Poon said. The funds came from a range of destinations, including family offices in the US, Europe and elsewhere that see Singapore as “a strong jurisdiction,” he said.