Hywin Wealth, VP Bank Report Finds Strong APAC Demand for Private Market Investments

Rhea-AI Summary

Hywin Holdings Ltd. (NASDAQ: HYW) and VP Bank Ltd. have released a report highlighting strong demand for private market investment opportunities in the Asia Pacific region. The report indicates that 77% of wealth professionals view current demand as strong, with 42% of investors expecting an IRR of 11%-15%. The technology sector leads interest at 62%, followed by healthcare at 21%. The report underscores the importance of wealth managers in navigating private markets, which are seen as essential for investors seeking diversification and higher returns amidst market volatility.

Positive

• 77% of wealth management professionals report strong demand for private market investments.
• Majority of investors in APAC expect at least an 11%-15% IRR from private markets.
• Hywin Wealth achieved RMB 78 billion in private market transaction value in fiscal year 2021.

Negative

• 50% of respondents cite lack of visibility over opportunities as a significant barrier for investors.
• 24% report lack of confidence or knowledge as a challenge for pursuing private market investments.

SHANGHAI, China, March 21, 2022 (GLOBE NEWSWIRE) -- Demand for private market opportunities is strong among investors in the Asia Pacific region, according to a new industry report jointly issued by Hywin Holdings Ltd. ("Hywin Wealth", “Hywin”, or the "Company") (NASDAQ: HYW), a leading independent wealth management service provider in China, with Liechtenstein-based VP Bank Ltd. and WealthBriefingAsia.

Over three quarters, or 77% of wealth management professionals, perceive current APAC investor demand for private market investment opportunities as strong, while 16 percent say demand is very strong, according to the report, ‘Why Wealth Managers Are the Ultimate Private Market Matchmakers’ (download: https://www.hywin.com.hk/wp-content/uploads/2022/03/Hywin_VPBank_Private_Markets_Report_2022.pdf). The joint report from Hywin Wealth, VP Bank, and WealthBriefingAsia provides a comprehensive overview of the rising APAC private markets and explains why wealth managers are an invaluable part of the ecosystem serving investors.

As the world enters a new era of fluidity and volatility in the aftermath of the COVID-19 pandemic, private markets are being “re-discovered” as an ecosystem for discerning, patient and strategically minded investors. Wealth managers are the ideal advisors for clients seeking private market opportunities as they have unmatched multi-disciplinary capabilities, relationship-building skills, and institutional clout.

“Innovation and disruption are fueling a boom in private markets globally,” Hywin Wealth Chief Executive Officer Madame Wang Dian says in the report. “APAC has tremendous momentum in terms of private market assets, investors, funding and intermediaries. We think China will continue to be the engine of growth and innovation, whilst Southeast Asia and India are rising as investable private markets.”

Private markets require investors to act on a long-term view, which can never be delegated to algorithms. It’s an ideal arena for wealth managers to showcase their abilities, according to Wang.

The private markets in APAC are fascinating in size and variety. The report sheds light on all the players in the private markets, including high-net-worth (HNW) and ultra-high-net-worth (UHNW) clients, as well as fund managers, portfolio companies, and financial intermediaries, serving as a guide to navigate through this space.

The strongest driver of the private market boom is a desire for outsized returns, 50% of respondents said, followed by a need for greater portfolio diversification, according to 29% of respondents, the report found. Interesting investment opportunities, participating in real innovation, and ESG aims were also key factors observed. The majority of investors in APAC, or 42%, expect a minimum 11%-15% Internal Rate of Return (IRR) from private markets, while 16% of respondents said investors target a 16-20% IRR, and 14% target a 21-25% IRR.

The typical net worth of an APAC private markets investor is over US$30 million, though there is also interest seen further down the wealth scale, in the sub- US$10 million range, according to the report.

Investors from Mainland China and Hong Kong SAR are perceived as showing the greatest enthusiasm for private markets, while investors from Singapore, Australia and New Zealand are also very keen, the report found.

Investors were most interested in private market opportunities in North America, 36%, followed by Southeast Asia, 33%, and China and North Asia, 29%.

The sector that draws most investor interest was technology, 62%, with healthcare/life sciences, 21%, coming in second.

As the demand for private markets opportunities grows, the biggest barrier for investors is lack of visibility over opportunities, according to 50% of respondents, followed by a lack of confidence or knowledge, 24%, the report found. For wealth managers, a lack of available expertise and regulatory complexity are seen as the biggest challenges.

Hywin Wealth is dedicated to providing industry-leading insights and knowledgeable advisory to both clients in Greater China and the global wealth management industry.

“We are glad to join in publishing this report to share our insights on private markets, where Hywin Wealth has achieved great success,” said Hywin Wealth Chief Financial Officer Lawrence Lok. “More than half of our total client transaction value in fiscal year 2021, or RMB 78 billion, went towards private market investment products. Apart from data and analyses, this report is informed by our extensive client work across private equity, venture capital and hedge funds to offer a lively narrative.”

About Hywin Holdings Ltd.
Hywin (NASDAQ: HYW) is a leading independent wealth management service provider in China focused on providing asset allocation advisory services and comprehensive financial products to high-net-worth clients. The Company’s primary services are wealth management, asset management, and other comprehensive financial services. Wealth management is currently the Company’s largest business segment, in which its onshore and offshore solution platforms serve clients across generations. For more information, please visit https://ir.hywinwealth.com.

Safe Harbor Statement
This press release contains statements that may constitute “forward-looking” statements pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “anticipate,” “estimate,” “forecast,” “plan,” “project,” “potential,” “continue,” “ongoing,” “expect,” “aim,” “believe,” “intend,” “may,” “should,” “will,” “is/are likely to,” “could” and similar statements. Statements that are not historical facts, including statements about the Company's beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Further information regarding these and other risks is included in the Company's filings with the SEC. All information provided in this press release is as of the date of this press release, and the Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Investor Contact:
Hywin Holdings Ltd.
Email: ir@hywinwealth.com

Media Contact:
ICR, LLC
Edmond Lococo
Phone: +86 138-1079-1408
Email: HywinPR@icrinc.com

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/5d739c47-5e3f-43b6-8cbb-7b62dd4e4589

FAQ

What is the report by Hywin Holdings and VP Bank about private markets in APAC?

The report highlights strong investor demand for private market opportunities, with 77% of wealth professionals indicating robust interest.

What percentage of APAC investors expect a 11%-15% IRR from private markets?

42% of investors in APAC expect a minimum IRR of 11%-15% from private markets.

Which sector attracts the most interest from investors according to the report?

The technology sector attracts the most interest, with 62% of respondents citing it as a preferred investment area.

What challenges do investors face in private markets as reported by Hywin Holdings?

The report reveals that 50% of investors struggle with visibility of opportunities, and 24% lack confidence or knowledge.