London’s Maseco targets American expats in Hong Kong, Asia with new outpost

Eight years after Maseco Private Wealth was set up in London to look after American expatriate clients, and following years of in-house research into the Asian market, a Hong Kong Maseco outpost has opened its doors.

Below, Helen Burggraf talks to Mark and Ashley Scher, the American couple who have been tasked with launching the operation, about how it’s going, and their plans for the business…

When James Sellon, Joshua Matthews and two others founded a wealth management business in London in June of 2008, to cater specifically to American expatriates living there, no one could have foreseen how timely their launch of Maseco Private Wealth would prove to be.

As it happened, they opened their doors just three months before New York’s Lehman Brothers bank collapsed, in what was to come to be seen as the start of what everyone would soon be referring to as the “global financial crisis” of 2008.

Nevertheless, they were ideally positioned to take advantage of the subsequent upheaval in the American expatriate world that would follow the 2010 introduction of FATCA.

FATCA, of course, was signed into law by President Obama in an effort to curb the use of offshore accounts by Americans to avoid their US tax obligations, by forcing non-US financial institutions to report in detail to the IRS on any American clients they had on their books. Almost immediately, these non-US financial institutions stopped accepting American expats as clients, just as these Americans were needing help with their finances more than ever before.

Today, as they open their long-planned Maseco outpost in Asia, Sellon, Matthews, and the two experienced Maseco team members they have dispatched to Hong Kong to oversee the new office say their timing is again proving to be auspicious.

“Even as recently as 2014 – well after FATCA had already taken hold – few people out in Asia believed that it was ever really going to impact on them,” explains Mark Scher, one of the two Maseco directors who are now running Maseco Asia Ltd, out of an office on Queensway, in Hong Kong’s Admiralty district. (The other director is his wife, Ashley, pictured with him, above; like him, she joined Maseco’s London team in 2010.)

“Everyone who was working in the area of wealth solutions out here – they just didn’t see it,” Scher, who is speaking to International Investment from Maseco’s Hong Kong base, says, of FATCA’s impact on American expatriates and their investments.

“They are starting to now, though.”

Maseco Private Wealth
Fact Box

Maseco Private Wealth: 2008
(the London company)
Maseco Asia Ltd: 2016
(the Hong Kong company)
Assets under advice:
Maseco Private Wealth: US$1.1bn
(£896m, €1.05bn)
No. of clients: 400-plus families
No. of advisers: 9
No. of employees: 45
Offices: two* (London, Hong Kong)(*The Hong Kong Maseco business is a distinct and separate corporate entity from the London company and is not legally a part of it)

Market research

Scher has been coming out to Asia on Maseco business since 2012, visiting Singapore, Hong Kong and other countries as he sought to “get a bead on what would make the most sense for us as a firm, looking towards expansion out here”.
Hong Kong made the most sense as an initial base, he says, because it has one of Asia’s largest American expatriate communities – numbering around 50,000, including many Chinese-Americans – and because it’s well positioned to look after Americans who live or do business in mainland China, of which Hong Kong is officially a “Special Administrative Region”, following the former British colony’s “Handover” in 1997.

Also, he says, as a market for expatriate Americans, Hong Kong has “a very similar profile” to London, where Maseco originated, and where it perfected its business model.

Both cities, for example, are major world financial centres, and therefore attract significant numbers of expat American bankers and financial services executives.
This is different from, say, the Philippines, another Asian market which is technically home to significantly more American expats than Hong Kong – something close to 350,000, according to Scher, although it varies – but because those numbers are largely due to several American military bases there now and in the past, it tends not to have as many of the specific type of client Maseco is accustomed to catering for.

“A condition of our Hong Kong licence is that our clients must have a minimum of HK$8m in assets, or roughly US$1m, to invest,” Scher explains. Technically, Maseco Asia Ltd is operating in Hong Kong as a discretionary fund manager, under a so-called Type 9 license from the Hong Kong Securities & Futures Commission.

Helen Burggraf
Helen Burggraf is Chief Correspondent for International Investment. She is a US-trained journalist who has worked in Rome, New York City and London, covering among other things the fashion and retailing industries, the global drinking water and water-treatment sector, private equity, and most recently, the international cross-border financial services/advice industry.

Read more from Helen Burggraf

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