Key Takeaways From In the Lead Asia 2024
April 11, 2024
Investing, entrepreneurship, legacy, and art were just a few of the thought-provoking topics we discussed at our inaugural In the Lead event in the Asia Pacific region. More than 100 women convened in Hong Kong to hear from thought leaders, explore new ideas, and forge new personal and business relationships.
Here are several key takeaways from the event.
There’s no good time to enter the market
Lately, two seasoned investment strategists at Goldman Sachs have heard the following concerns from investors:
“I want to build more equity, but valuations are so high.”
“What if there’s a pullback? There’s no good time to enter the market.”
Yes, there are many geopolitical risks facing the market right now, as well as anxiety around interest rate cuts, recession, prolonged inflation, and political partisanship. These issues tend to make investors question their market timing.
But Global Head of Managed Strategies Jean Altier Bohm says the challenge of when to enter the market is a consistent, evergreen issue. When you’ve managed investments and portfolios for decades, it becomes easier to tell when market conditions are truly anomalous and one-of-a-kind versus a pattern.
“Regardless of what’s on the front burner,” Altier Bohm says, “it never feels like a great time to buy equities.”
Mariam Kamshad, a managing director within the Wealth Management Investment Strategy Group, says while her team is remaining vigilant on the risks, none of them are elevated enough to merit staying out of equities entirely.
“We encourage clients to stay invested at their strategic asset allocations. These allocations account for systematic market risks – meaning market-wide risks – but also your personal time horizons and risk tolerance,” she says.
For clients with excess cash sitting on the sidelines, Kamshad and Altier Bohm help them figure out disciplined plans to enter the markets, such as averaging in over a period of nine to 12 months or using an options strategy to receive a premium while buying shares on days when the market dips.
For clients interested in leveraging a fluctuating interest rate environment, Global Head of Private Bank Lending and Origination Anne McCosker points out there are opportunities in lending that allow investors to restructure existing loans and purchase additional assets at attractive valuations.
Infusing purpose and longevity into your legacy
Starting your own venture is a powerful way to create and establish your legacy. When Kim Kwok founded the Mighty Oaks International Nursery and Kindergarten, and later, Acorn Playhouse, it wasn’t only about creating educational spaces for children to learn and play. Her ultimate legacy goal was to equip young children and their families with strong moral values.
In conversations, she realized many parents and caregivers talked about prioritizing character and wanted to instill good values, but when asked to choose, they were only focused on academics.
“My biggest challenge is convincing parents that character education is as important, if not more important, than academics,” she says. “You have to make a focused effort on it at school and at home.”
Programming at Mighty Oaks and Acorn Playhouse centers on activities that foster problem-solving, self-awareness, team-building, and social-emotional skills. Kwok also supplies families and caregivers with tools and strategies to continue these learnings at home.
To build resilient children, Kwok encourages families to start by incorporating a daily gratitude practice at home.
“If you don't have a core support system you call home, it's impossible to be confident and resilient because you don’t have someone who can catch you when you fall,” she says. “That's why I always go back to love. Does your child know they are loved regardless of what they accomplish?”
Ultimately, Kwok’s goals mirror the legacy work many families are focused on: raising compassionate, resilient children who go on to do good in the world.
Exploring new opportunities in private equity
Asia's private equity market has been muted, but investors can still find ample opportunities in the right sectors, especially as momentum picks up.
“The penetration rate of alternatives is still very low right now, particularly in Asia, so it’s a good idea to look closer at this asset class because you don't have to watch the volatility every day and can just set your eyes on the long term,” says Stephanie Hui, head of Private and Growth Equity in Asia Pacific.
Panelists discussed several emerging trends in private equity markets, including the rise of digitization, experimentation with generative artificial intelligence, and new opportunities in Japan and India. Investors looking at opportunities will want to assess companies for two key things: innovation and resilience.
While last year’s buyout market was slow, primarily due to high prices and low offers, coupled with expensive debt, Hui thinks 2024 will see more activity as sellers become more willing to accept price adjustments. She also forecasts more momentum in Hong Kong specifically, as low liquidity and low valuations begin to increase.
“It’s a buyer’s market, and it’s a good time to court companies and see how they are following through on their goals before committing,” she says. “This is the moment where, if you see something you’re interested in and you have conviction, you could go for it. Just know the good stuff is expensive.”
Private equity tends to carry more risk than public markets. If you’re interested in exploring this space, reach out to your private wealth advisor.
Building an art collection? Look beyond aesthetics
Building an art collection can be a fun but also daunting process for new collectors. Beyond developing a personal aesthetic and finding inspiration by visiting museums, galleries, and auction houses, there are many considerations for an art buyer to explore.
Gladys Lin, founder of Gladys Lin Projects, says art advisors play a vital role for individuals and institutions, as they use vast market knowledge to help source quality pieces for investment purposes. Still, some collectors aren’t convinced they need to hire an art advisor.
“People decorate their own homes without retaining an interior designer, so they don’t feel the need to hire an advisor to help them shop for art,” Lin says.
However, an art advisor can offer independent guidance with respect to quality, market trajectory, and acquisition price, whereas the collector may only be thinking about aesthetics and what they hear other people are acquiring. This can potentially save you time and money in the long run.
Monica Heslington, head of Goldman Sachs Family Office Art and Collectibles Strategy, also recommends casting a wide net and looking at art from different time periods, cultures, and regions. The process can take collectors all around the world in search of creativity and what resonates in a lasting, unique way. The more adventurous and open-minded you are with the type of art you are exposed to, Heslington says, the more rewarding the experience of art collecting can be.
Be willing to pivot when building a business
If you’re committed to making a difference or solving a problem in the world, two women who founded nonprofit groups have some words of wisdom: figure out the how and be willing to pivot.
Nanette Medved-Po, founder and chairperson of HOPE, PCX Solutions, and PCX Markets, says the first time she tried to pitch her idea to investors in the business sector, no one seemed interested in investing in social good.
“I decided I was going to show them instead,” Medved-Po says. “If you think you have a solution to the world’s problems, you need to think big.”
In 2012, she set up a nonprofit called HOPE to help fund the construction of public school classrooms in underprivileged communities in the Philippines through the sales of HOPE-branded water. However, she quickly realized she was solving one problem by adding another: more plastic pollution.
That led to her to set up PCX Solutions, a nonprofit that advises companies and governments on plastic responsibility and manages the Plastic Pollution Reduction Standard (PPRS) and PCX Markets, a plastic credit marketplace that funds audited, traceable plastic waste recovery and responsible processing worldwide. While she never expected that outcome, it was a perfect complement to HOPE’s mission.
Jennifer Yu Cheng, founder of the JYC Girls Impact Foundation and group president and deputy vice chairwoman of CTF Education Group, emphasized the need to examine the ‘how’ of doing the thing you want to do.
“If you’re capable and you have a bold vision, financing, and connections, start with figuring out the first steps you need to take to accomplish that vision,” she says.
Developing AI’s exciting potential
The fast-evolving landscape of artificial intelligence (AI) presents endless possibilities. As the director of the Center for Perpetual and Interactive Intelligence in Hong Kong, Helen Meng is on a mission to bridge the gap between AI and human interaction through the applications developed in her technology ecosystem. She says the goal is to produce concepts that will allow machines to sense the environment and humans to interact with the machines.
Meng discussed projects in the pipeline, including the use of perceptual technologies that could innovate healthcare via more precise medical imaging or assist cities in responding more quickly to challenges like natural disasters. AI could also innovate smart fabrication by converting pictures of an individual into a 3D model and knitting a customized garment for that person.
These exciting developments in AI will still require caution. Meng underscores the importance of addressing hallucinations, data biases, and misinformation as well as developing laws and safety measures related to issues such as privacy, copyright, and ethics.
“We need to think about responsibility, responsible use, and beneficence because we ultimately want technology to do good for society,” she says.
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