«HOLT helps makes decisions that are explainable and repeatable,» says Credit Suisse executive Jonathan Tischler, which in the volatile economic scenario playing out today, is no mean feat.

By Shruti Advani, Editor-at-large, finews.asia

China is expected to be the second largest asset management market by 2025, according to a report by the Boston Consulting Group released earlier this year.

Not surprisingly then, a PWC survey of 126 global asset managers found 40 percent of non-Chinese lenders are actively targeting China this year. Even pedigreed money managers will find it hard to distinguish themselves in the rush to get a share of Mainland money.

Made Available to Chinese Clients

One such pedigreed money manager – Credit Suisse – has responded by introducing its proprietary analytical platform HOLT, made available to Chinese clients in phases that began at the start of November.

In the aftermath of Stock Connect (a collaboration between the Hong Kong, Shanghai and Shenzhen stock exchanges that allows Mainland Chinese and international investors to trade securities in each other’s markets through the trading and clearing facilities of their home exchange), the sophisticated analytics and modelling that the platform can provide on 20,000 equities is appealing.

Significant Home Bias

Significantly, half of that equity universe or 10,000 equities are listed on Asian exchanges, catering to the significant home bias of the region’s investors.

Jonathan Tischler (pictured above), head of HOLT Asia Pacific and head of equity research Japan, Credit Suisse believes the platform capitalizes well on what he describes as «the equification of wealth in the region». «The reaction has been quite positive in China,» he says, fresh after a launch event on the 6th of November in Shenzhen.

Well-Suited to Family Offices

Aside from the leading money managers of the world, HOLT is also well-suited to family offices who can access the platform through Credit Suisse’s private bank. The cachet the product enjoys amongst institutional investors is likely to make it aspirational for quasi-institutional investors like Asia’s rapidly growing family offices. Tischler sounds suitably confident, «We have cornered the market in the space where we play – where the end client is an institutional investor.»

But given the penchant for financial technology investments amongst banks, private equity funds and technology companies, isn’t it likely similar offerings will crop up soon enough? «There are a few products out there that are similar,» admits Tischler, «but we work with 600 institutions globally so if clients were using our product, they would be unlikely to replicate with our competitors.»

Marquee Brands

«Quest is one of the alternatives investors could use,» explains a Hong Kong-based head of equities at a private bank, «but HOLT is popular with the big boys,» he says referring to some of the largest fund houses on the street. Tischler refuses to name clients on the record but confirms that they are marquee brands in the asset management universe.

But if HOLT is the secret sauce for several managers, how do they in turn differentiate their services to investors? Can anyone with access to the same analytics can replicate performance? «We are not out to displace our clients,» Tischler is quick to clarify, «professional money managers add demonstrable value so HOLT is not a replacement for them.»

Explainable and Repeatable

Instead, Credit Suisse works with institutional clients who bolt other layers onto HOLT so that the end product is unique. «[In those instances], we are not the end-product but are contributing to the manufacturing process,» Tischler explains.

But by far, the primary appeal of the platform is its ability to provide comparability between equities in different geographies, currencies and industries that is required for global investment decision making. «HOLT helps makes decisions that are explainable and repeatable,» says Tischler, which in the volatile economic scenario playing out today, is no mean feat.