* Alibaba IPO represents latest minting of China
* Private banks beefing up Greater China, Singapore teams
* Share surges for likes of Tencent also creating new super
By Saeed Azhar and Nishant Kumar
SINGAPORE/HONG KONG, May 9 Alibaba Group Holding
Ltd's planned IPO is set to create a long list of
multi-millionaires just from its partners in the company - music
to the ears of private bankers seeking to cash in on the wealth
created by China's tech sector boom.
While Alibaba's U.S. listing may become the
biggest tech IPO in history, it is also just one of more than
120 Chinese tech listings over the past three years.
Combine that with surging share prices for firms such as
social messaging giant Tencent Holdings and Internet
search provider Baidu Inc, and private banking is
having what many in the industry are calling a once in a
lifetime opportunity to cultivate China's growing ranks of the
China already has more millionaires than any other country
in Asia except Japan and is likely to have more than 1.3 million
by next year - more than double levels five years ago, according
to data from Julius Baer.
"Technology globally is one of the key wealth drivers," said
Mark Jansen, a partner at PricewaterhouseCoopers. "So it is not
surprising we are seeing so much wealth being created in China
given the size of the domestic market and surge in demand for
everything through the digital space."
In response, private banks are beefing up their teams in
Hong Kong and Singapore - seen as gateways for offshore Chinese
wealth. Asia's biggest wealth manager UBS, for
example, has increased its Asia Pacific wealth management staff
by 8 percent this year to 1,120.
The tech, media & telecommunications team at the banking
unit of Singapore's DBS Group Holdings has also
expanded its services to wealth management, in addition to
investment banking and corporate banking.
Tee Fong Seng, market area head of Greater China for Credit
Suisse's private bank adds that the bank has seen
significant growth in its business and number of relationship
managers in Greater China in the last year. The number of its
relationship managers across Asia-Pacific has grown 20 percent
in the last two years, with bulk of those based in Hong Kong and
The listing of Alibaba, known as China's Amazon - which some
have touted as being worth more than $15 billion - is set to
elevate Chairman Jack Ma's wealth ranking to among the top five
of Forbes' China rich list, up from eighth place in 2013. His
8.9 percent stake in Alibaba is valued at $10.3 billion based on
fair value estimates of the company.
Alibaba also has another 27 partners who own "a meaningful
level" of equity in the company although precise levels have not
been disclosed, and who are expected to become
multi-millionaires with the IPO.
Enriching executives and shareholders, the seven tech
companies part of the MSCI China index, including Tencent,
Lenovo Group Ltd and ZTE Corp
have seen their combined market capitalisation surge by nearly
75 percent to $149 billion since the start of 2013, according to
Thomson Reuters data.
Tencent crossed the $100-billion mark in market
capitalisation last year, more than doubling in value since
listing in 2004. Tencent's founder and CEO Ma Huateng was ranked
by Forbes in 2013 as China's fifth-richest man with a net worth
of $10.2 billion, while Baidu's Robin Li is ranked number 3.
Huawei Technologies Co Ltd, which generates annual
revenue of $35 billion, is another company that private bankers
say is likely to be fertile ground for potential clients, even
if it doesn't list. The company's shareholders are its 150,000
The young, highly educated and globally mobile tech sector
millionaires are also proving to be refreshing for bankers used
to Asian clients who mainly stick to areas they are good at.
They are more measured in their returns expectations and
appreciative of global diversification and asset allocation.
Compared to those who have made their money from real estate
or mining sectors, tech millionaires "are more interested in new
ideas, people, talent, angel investments," said Philippe
Legrand, chief executive of London & Capital Asia.
But they are also far more conservative than their flashy
counterparts in the Silicon Valley, preferring to put money in
wealth preservation financial assets and in Chinese-speaking
Property investments in Singapore are one such example -
buyers from China represented just under a third of all foreign
buyers last year, up from 15 percent in 2009.
These new millionaires also tend to be a much more closely
knitted group of people and as a result, bankers are tapping
clients through trusted referrals most of the time.
Bankers say their immediate challenge is to ensure these
tycoons become cash rich rather than just paper-rich with the
bulk of their wealth locked in their companies. To that end,
they are recommending options such as financing against shares
so they have enough cash to invest in other assets.
"They are not going to be cash rich overnight. They are
going to be stock rich," Tan Su Shan, group head of consumer
banking and wealth management at DBS Bank said in an interview
"Most of them will stay with the stock and they will have to
work with the banks who are willing to take a view on providing
liquidity," she said.
(Additional reporting by Elzio Barreto; Editing by Denny Thomas
and Edwina Gibbs)