The Chinese HNWI Market in 2012


Published on

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

The Chinese HNWI Market in 2012

  1. 1. The Chinese HNWI Market in 2012Report Details:Published:August 2012No. of Pages: 94Price: Single User License – US$3800•The report provides market analysis, information and insights, including:•Drawing on both primary and secondary sources, the report provides a bottom up description and analysis of the mainland (HNWI) market•It examines changes in the investment approach taken by Chinese HNWI since 2007-8•Domestic institutions offering on-shore services are listed, and the regulatory environment is also discussedExecutive summaryDespite the global financial uncertainty, the number of high net worth individuals (HNWIs) in Chinahas risen sharply by 41% in each the last four years. Although HNWIs make up only 0.4% ofChina’s population, this is equivalent to over 4 million individuals. Furthermore, the number ofHNWIs in China is expected to double by 2015, which will change’s China’s position as the third-largest global wealth market in 2011 to the second-largest global wealth market in 2015. By theend of 2011, there was an estimated US$4.3 trillion of investable assets in China. It is estimatedthat HNWI wealth will grow at a compound annual growth rate (CAGR) of 14.7% over the forecastperiod (2011–2015), to reach US$7.5 trillion by 2015. This excludes important contributory factorssuch as private business assets, real estate investments, art and other luxury investments oroffshore funds.Scope•This research report analyses the changing HNWI demographic in mainland China•It assesses the impact the capital markets correction in 2008 had on client expectations•It considers the private banking services that influence a clients choice in provider•It details the best way to move forward and capitalise on this valuable marketKey highlights•The number of HNWIs in China increased by 41% every year during 2007–2011, and the number of HNWIs reached almost 1 million in 2011 while the number of UHNWIs reached 60,000.•The volume of UNHWIs in finance is projected to grow by 25% per year over the forecast period, due to the large growth in the private banking, bonds, hedge funds, private equity and insurance industries, as well as the continued wealth diversification of China’s middle class.
  2. 2. •HNWI allocations to property are expected to fall to 23% of total assets in 2015, from 27% in 2011. However, the amount of wealth held in foreign real estate is forecast to increase.Reasons to buy•Establish the distinct demographics of Chinese HNWIs•Read how Chinese on-shore HNWIs invest to generate excess returns in a less favourable macro environment•Assess the impact of the 2008 global de-rating on client expectations•See what the constraints on the domestic wealth market are•Find out how the offshore market can gain Chinese investors if the right performance and service can be offeredGet your copy of this report @ points covered in Table of Contents of this report includeTable Of ContentsExecutive SummaryList of FiguresList of TablesChapter I: Key facts on HNWIs in China1.1 Traditional regional distribution of HNWIs is changing as growth is increasing in inland cities1.2 Lowering property prices will threaten HNWI growth in 20121.3 China is in the top three in terms of number of households with a net wealth of US$1 Million1.4 Volumes of both HNWIs and investable assets will grow quickly in the next three yearsChapter 2: The geographical distribution of Chinas HNWIs2.1 Beijing, Guangdong and Shanghai are the key 3 regions2.2 Top three regions account for nearly half the total number of wealthy individuals2.3 The traditionally less attractive east coast has had a bigger growth of HNWIs than the rest ofChinaChapter 3: Segmenting HNWIs3.1 Business owners - 55% of the total HNWIs3.2 Real estate investors3.3 Stock market investors3.4 Senior managementChapter 4: Industries monopolise HNWI wealth creation4.1 The entertainment and retail industries are lagging behind their peers worldwide
  3. 3. Chapter 5: Profiling Chinese HNWIs5.1 A typical Chinese HNWI5.2 The US losing its level of billionaires5.3 Starting from scratch - first-generation wealth accounts for the majority of HNWIs5.4 The majority of Chinese HNWIs are under 50 years old5.5 Women represent a higher proportion of HNWIs in China than globally5.6 The majority of Chinese HNWIs have post-graduate degreesChapter 6: HNWI investment behaviour6.1 Opening up to the idea of professional wealth management services6.2 Market volatility during 2007-20096.3 Most HNWIs are prepared to take medium risks6.4 More Chinese HNWIs are thinking about inheritance issues6.5 Current investment tendencies for Chinese HNWIsChapter 7: Investment aims of Chinese HNWIs7.1 Ever-increasing expectations7.2 Prioritising investment aims - the top three7.3 The most generous donors7.4 The majority of donations are event-specific7.5 Chinese banks are getting involved in charity7.6 Wealth preservation has an influence on domestic and foreign asset allocation7.7 Chinese HNWIs pursue investment immigration7.8 The complexity of managing overseas assets will require professional advice7.9 Educating children is becoming more important7.2.1 Dynamics of HNWIs asset allocation7.2.2 The need for financing and value-added services7.2.3 Word of mouth is the most important information channel for choosing a private bankingserviceChapter 8: The competitive landscape of Chinese private banking8.1 An overview of the private banking industry8.2 The five largest state-owned commercial banks are active in private banking8.3 Local and foreign banks now offer private banking services throughout China8.4 Chinese private banking networks8.5 Ranking the domestic banks private banking businesses8.6 Leading private wealth managers among Chinese domestic banksChapter 9: Overseas banks in China9.1 Overseas banks less prominent than they would like to be9.2 How overseas banks are organised in China9.3 Foreign reputations took a knock following the banking crisis
  4. 4. 9.4 Differences between domestic and foreign banksChapter 10: The advantages of a state-controlled banking system10.1 Domestic private banks are the first choice of wealth management customers10.2 Expectations of a new banking model to emerge10.3 The future for private banking servicesChapter 11: The policy environment for QDIIs and QFIIs11.1 Qualified Domestic Institutional Investors (QDII)11.2 QDII Scope Widened in 200711.3 QDII Regulations are Rigid11.4 QDIIs scope expanded11.5 Investing on the Hong Kong stock exchange11.6 New private banking regulations11.7 Qualified Foreign Institutional Investors (QFII)11.8 Cross-border Co-operationChapter 12: Xintuo Chinese Trusts12.1 Investment Trusts gaining in popularity12.2 A uniquely Chinese proposition12.3 Lightly regulated12.4 History of the Chinese trust sector12.5 Enacting the Trust Law12.6 Recent updates from the trust sector12.7 Structures and product composition12.8 Real estate investment trust (REIT)12.9 QDII quotas to trust companiesChapter 13: Other types of trusts13.1 Alternative investments13.2 Private equity investment trusts13.3 Securities ITs13.4 Infrastructure ITs13.5 Bank-trust co-operation Products13.6 Trust companies13.7 Strategic overseas investorsChapter 14:14.1 Noah Private Wealth Management14.2 The ease of starting up a wealth management business14.3 Unregulated lending?14.4 Private lending - Total market size
  5. 5. 14.5 The problem with negative real interest rates14.6 Informal borrowing channelsChapter 15: The Chinese economy - boom and bust?15.1 A slowing economy15.2 An overheating real estate market15.3 Real estate accounts for 40% of investible assets15.4 An overheating real estate marketChapter 16: High-end consumption16.1 The art market16.2 Fine wine16.3 Luxury goods16.4 Yachts and PlanesAbout the authorsList Of TablesTable 1: The geographical distribution of Chinas HNWIs by regionTable 2: The sources of HNWI wealth in China and the worldTable 3: Competitive advantages of different financial institutionsTable 4: Number of branches and centres that are owned by banks providing private bankingservicesTable 5: Quota and Approval Time of QDIITable 6: Where will HNWIs invest their money? (by region)Table 7: Shares of foreign investors in Chinese trust companiesTable 8: Regulations in real estate marketList Of FiguresFigure 1: HNWIs - Regional distribution, 2011Figure 2: HNWIs - Sources of wealth, 2011Figure 3: UHNWIs - Distribution by primary source of wealthFigure 4: General scale of China national individual investable assets, 2006-2011Figure 5: HNWIs wealth market attractiveness, 2007-2015Figure 6: The value of investable assets owned by HNWIs in major cities and provincesFigure 7: HNWIs - Growth in minority and inland regionsFigure 8: Distribution of China HNWIs by professionFigure 9: HNWIs - Age distribution, 2011Figure 10: Education background of Chinese HNWIsFigure 11: Self-evaluations on personal investment experience among HNWIsFigure 12: Changes in HNWIs risk preference
  6. 6. Figure 13: HNWIs - Changing trends in total liquid assets (% of total assets), 2007-2015Figure 14: Chinese HNWIs favorite charity channelsFigure 15: Top investment immigration destinations for HNWIs in ChinaFigure 16: Diversification of objectives for Chinese HNWI wealth managementFigure 17: Allocation of HNWI assetsFigure 18: Demands for financingFigure 19: Value-added services demanded by HNWIsFigure 20: Main criteria for selecting a private bank and wealth management institutionsFigure 21: The information channels for acquiring information on the private banking IndustryFigure 22: Number of private banking centres operated by main market playersFigure 23: The number of private banking clients and the scale of investable assets owned bythese clients in 2010Figure 24: Chinese HNWIs selection of private banks and high-end wealth managementinstitutionsFigure 25: Chinese HNWIs private bank and wealth management institution selection trendsFigure 26: Trust Asset Scale (CNY bn) in 2005-2011Figure 27: Trust industry assets as a percentage of GDPFigure 28: Scale of trust products on real estate industryFigure 29: Percentage of usage of fund raised by trust productsFigure 30: PE partnership financing structureFigure 31: Commission charges for third-party consultancyFigure 32: A pawnshop in OrdosFigure 33: Chinese GDP growth from 2007Figure 34: The scale of the capital markets in ChinaFigure 35: Art category transaction volumes - spring 2011Figure 36: Global luxury goods market sales, 2003-2010(Euro bn)Figure 37: Mainland China luxury goods market sales, 2007-2010(Euro bn)Figure 38: Global luxury goods market sales, 2003-2010 (Euro bn)Figure 39: Preferred location for buying luxury goodsFigure 40: Brand ranking among customers in Beijing and ShanghaiFigure 41: Luxury goods bought by Chinese HNWIs in 2011Contact: for more information.