Why Careful Selection of the Advisors and the Deals are such Crucial Elements for Private Asset Investments

Dr. Jon Wongswan is Managing Director at Kiatnakin Phatra Securities and added his weighty views to a panel discussion Hubbis held on the evolution of private assets and the Thai HNW investor. The discussion took place at the May 25 Hubbis Thailand Wealth Management Forum in Bangkok, and a lively debate ensued on the risks and rewards of adoption greater allocation to private assets. Some of the discussion centred on whether investors should stop and rethink such investments in light of the weakness in mainstream markets thus far in 2022. Is there a risk that investors follow somewhat blindly into the market? Wongswan offered his views, remarking that it all boils down to selecting the right managers and aligning the interests of the vehicles, the managers, the target companies and the investors. We have summarised some of his observations in this brief report.

Wongswan introduced himself as representing KKPS Wealth Management, the private banking operation within the KKP Group.

“I head the investment solutions team within our private wealth business, and when we look at clients’ total portfolios, we see a significant role for private assets within these portfolios,” he reported.

“These types of assets have two key appeals. First, private assets can provide enhanced returns. Second, these assets diversify risk within portfolios and offer access to a very active type of management, and although you are buying into equity, the structure of the return is quite different from the public markets.”

Wongswan told delegates that the right types of opportunities do not come across the desk all the time, but that periodically, appealing deals emerge.

“We see a very wide range of performance across different managers, and it is tough for our clients to distinguish or to select which one to invest into,” he reported. “Other issues to address are the size of investment required and liquidity has always been a big issue. People might at first say they are ready to go into these private investments for 10 years, but once you start doing that, the real patience to stick to that timeframe is always difficult.”

He explained that some of these issues can be overcome with the right type of alignment between the vehicle, the managers and the underlying companies in which they invest. “And then the investors need to align their interests and their expectations with those elements, as well,” he reported. “But I think at the end of the day, it really all boils down to selecting the right manager, because there are so many different opportunities, so many different deals, and so many different stages of private equity.”

Dr Jon Wongswan – a Snapshot

Kiatnakin Phatra Financial Group is originally the result of a merger of a commercial bank operated by listed Thai bank Kiatnakin Bank, with extensive experience of over 40 years, and a capital market business operated by Phatra Securities, a leading company in securities brokerage business in Thailand.

Kiatnakin Phatra Financial Group is listed in the Stock Exchange of Thailand (SET) as KKP and operates businesses in financial and capital markets, focusing its expertise on a wide range of services covering all needs of customers, including individuals, businesses, and domestic and international institutions.

Wealth management is a core activity within the group and Dr Jon Wongswan is Managing Director and Head of the Investment Solutions Department at Kiatnakin Phatra Securities, where he oversees investments and product selection for the Wealth Management Group.

Wongswan is a regular in the Hubbis pages and one of the tried and trusted experts on the Thai wealth management market and in the past also spent some eight years of experience working with the US Federal Reserve and then Barclays Global Investors, so has a very global perspective on key markets and key emerging trends.

Kiatnakin Phatra Securities, or KKPS for short, is still perhaps better known in Thailand as Phatra, even if it is no longer that entity alone.

Jon himself has enjoyed a significant expansion of his roles since the pandemic, helping Phatra to play smart to stay ahead of the game. As well as his teams for equities, for fixed income, and for structured products, he now also has a small but fast-growing team for private markets, launched in 2019, and that he reports has become a significant portion of the business.

Jon also oversees the newish KKPS team for investment consulting and another team for discretionary mandates that was launched in September 2020, managing global investment portfolios for clients. Finally, they have another team for the platform and execution, as well as a data analytics team, all of which fall within his remit as MD of the investment solutions department.