Devere: All right. Welcome to the P-FACTOR. today. We have Hardy Liu, who is the managing partner at Altive. Welcome Hardy.
Hardy: Thanks for having me.
Devere: Really, really glad to have you here. So why don’t you just tell us about Altive what you do? And really importantly, what’s the genesis of this business? And what’s your story?
Hardy: Yeah, I mean, Altive is really about alternatives as the name can tell. Well, we are a private market platform for private wealth individual in Asia. Well, my story comes back to we’re back to five years ago, before we started Altive I was fund manager at Macquarie. Well, during that time, the CEO of Macquarie said they’re three trends in asset management industry. One is, private market, because private market is actually strengtheded and then the private market is actually booming. The other one is private wealth, because institutional investor, there’s only so many of them that you can’t find another GIC tomorrow, so everyone’s going for private wealth, and Yes, Asia. So that’s what we’ve done with the private market platform for private wealth in Asia. So really, what it is, is, is about like breaking alternative investment from institutional size to take a size to smaller ticker size, where high net worth individuals can easily participate. I think back to the Macquarie time we see the flagship by private market fund like infrastructure funds, or private equity fund, the minimum ticket size, it’s like 10 million bucks. And I mean, I, we are well paid, but we can’t pay 10 million ticket for one investment. So I can’t even invest myself. So is my friend and friends and family. So I thought this is super unfair. So we, we start out by building a large what we call feeder fund, where we aggregate tickets from 100k ticket size that you’re asked to, to, to to abate, like single feeder fund can be put into ticket size of 10 mil or even 100 mil to underlying manager underlying asset. So I was… not everyone but at least like general, professional investor, high networth, they can invest into these top tier funds and projects.
Devere: Right. Okay. So sounds to me, like you have somehow designed a business here that bridges a gap between private investment and what I would describe as public investment. So those institutional investment funds that only businesses have the opportunity to go into like, like pension funds and whatnot, right? Yeah. So that’s an amazing opportunity for the Hong Kong economy, amazing opportunity for people to aspire to getting their net worth into a position that they can grow and have access to these funds. So I completely see where you fit in, and how you will be able to grow. But how do you see the landscape generally in Hong Kong right now, as a FinTech business, or as a business that’s in the wealth tech area? Do you see Hong Kong growing as a general FinTech economy?
Hardy: Yeah, I think well, one, well said there’s a lot of dividend area like Robo advisory more on the public market side, this is one while there, we have seen like several like player coming from Singapore or the rest of the world to build the franchise here. I see on the other side, well, they’re also like, thinks that we are focusing more on the private market side, where we see our friends from US and Europe, they’re coming to these areas for. So far, I think we are in terms of private market we are one of the biggest in the in the area. We that we see growth every year. So the market also grow every year. I think is it… we work in if see where the quantity is coming from right? Well, money is not going to be it’s not going to get more we are in an interest rate hype environment. There is not going to be more money borrow. But the behavior of people is changing. I mean, like one day people definitely see investing more on the private market. That’s what we’re doing. Second they invest more on the… say crypto related stuff. That’s why we see government regulation changing and a bunch of startups come in. People will definitely see moving on just from stock trading to more sophisticated portfolio building or why investment… like investment with plan. So this is where why we advisory are coming in. So in general, I do see quite a good future about Hong Kong startup.
Devere: Amazing. No, it’s amazing to see and I think whenever you do bridge a gap like we were talking about there or you introduce a new channel to access whatever it is that you’re selling or giving access to there’s an element of of education that has to happen. So how does how does that work, Hardy? So if I’m a first time investor, I’ve either moved to Hong Kong or I have access to funds that I had, that I’d want to utilize and build for the future. How does it work? How do I get them over to over to Altive and have you helped me?
Hardy: I think that’s a very interesting question. I used to be in the exact right way to invest in the private market that we believe into, may not be the market gimmick that people will get clicked. For example, if you asked me what’s the right rate to ideal portfolio of like people invest in a private market, you’ve got to invest like 80% into co-mingle funds, and then that diverse into private equity, real estate, infrastructure, private credit, and you adjust that portfolio on a yearly basis. That sounds boring.
So we didn’t use that as a market gimmick. Versus on the other side, where we do understand like, what people get click, for example. Well, we we have a spaces fund to get access to SpaceX, for example, you heard about Elon Musk, yeah, you want to invest into SpaceX, we can talk. That’s a much easier opening line. And I mean, like people to come into our deals fund usually, they will also they will then get more time to listen to the right way to invest in a private market. And if asked more of the capital, either that we will say safety is the right way to get them click, you’ll never come up with a task of story of how was the periodical the best way to invest?
Devere: Yeah, I understand that. It’s an it’s beautiful. When I think about this, now you’re opening doors to access funds or access investment opportunities that people may think aren’t really attainable whilst being in Hong Kong. So for example, as you just said, they have a SpaceX, people may think, Oh, that’s a US based structure. There’s no way to get in, and you guys can come in and help people understand that there is a way and I could potentially do it through Altive so, it’s not only bridging a gap, it’s opening doors at the same time. It’s so wonderful. I guess there’s a onboarding process that you need to go through screening and due diligence and whatnot to make sure those people are making the right bets.
Hardy: Yeah, I think this is another key hurdle that we see in the traditional private wealth industry. Well, it took us like, what like maybe two or three months time to open a private bank account, and welcome to private bank, Mr. Banker. But the roughly and like we build an online portal with the assistance of our team member, that you can open an account within same day, you can subscribe by.. to a fund, by clicking several, like, like, just within less than less than 10 minutes time, you can fill the application form, verses the first time I filled a subscription form of a private fund. It took me 30 minutes. And I mean, how do I… how do I know where my tax status is. all these thing is very tricky.
So we built a streamlined process for people to get themselves clear their KYC suitability test. And it’s done. We understand the law or regulations that everyone has to follow, we just apply that on a more streamlined manner.
Devere: Now, I love it. And that access to efficiencies is what people want as well, right? So people don’t want to have to fill out paper forms, take two days, two weeks, because they may feel like they’re missing the opportunity, the investment they’re looking at could go up or down. But you want it to happen in real time, but safely, as you mentioned, yeah,
Hardy: I think, for people what you what you will really want to spend more time on is understanding the investment instead of like… filling informs.
Devere: Correct. Okay, so one of the hot topics in the world right now, we can’t avoid talking about it. And I know through some of the expanded universe that you manage, there’s an element of AI involved here. How does Altive utilize AI? And what’s your view on how AI can help in this world in this industry moving forward.
Hardy: We manage a large number of different investment. Traditionally, it would take maybe a 20 people team to to work on this investment, monitor how they goes and discover new ideas. So for us, I mean, like with the help of AI, ChatGPT and all these things. We just easily monitored the news of all these different companis that you invested. SpaceX If they start a new one, I’m going to get a customed notification on my form within, say five minutes time. And I can draft a simple, like investor update to my client within several clicks, and obviously, the added from the investment team. All these are possible for even large investment bank, but I think it will take, you know a much longer time for them to implement. The other ways that we look into that is for, in terms of, understanding the investment material, how we decide the investment material, and how we educate clients. For different client, you’ve been given set of light material for them to understand the because some of them are less sophisticated, some of them they want more detail. So, by having an AI we can decide these material or much more easily. Yeah.
Devere: Understand, okay, that’s really, you know, it’s good utilization of it, and it builds back into that efficiency piece as well, exactly. If we’re gonna help you realize data, again, quickly, process data quickly, that helps the customer as well and helps you from a human resource perspective. So where do you see? Not that I want to go negative here. But where do you see the biggest challenges over the next 2, 3, 4 years? For Altive or anybody in your space? Not just in Hong Kong, globally?
Hardy: Well it is for anyone in the wealth technology or like in the asset management industry the last year or the last two years, where we are in the interest rate high cycle, It’s not gonna be easy. Well, even you ask some more traditional broker or like traditional wealth manager, is it easier to get customer in a bull market or bear market? Everyone will pick bull market. But I think for us is a good thing that while private market is not like speculative in our wheel, is actually a very good diversification to use from public market volatility. So from that angle, we actually see a lot of like in potential investor or clients, that comes to us to say that, hey, I lost money in bonds I lost money in in public market, and I definitely want to diversify a little bit more, that we get some loyal customer who, who want to, like leverage our expertise in private market. The second thing that I think is, changing in the whole not only in wealth tech or FinTech environment, is that how well Hong Kong and Singapore are very different anymore. I do think Singapore, they got lots of like, like government support online, they will definitely see like, invest into a startup and say, Hey, there is the Singapore government back this startup. This is not something that we see in Hong Kong. So how a good news is that I do see, Hong Kong Government is rapidly changing their way in terms of helping startup in, in our state the last 6 to 12 months. So that way, I think I would be quite optimistic in terms of the future of why Hong Kong startups in three to five years.
Devere: That’s great. And we see it living here. You know, I’ve worked a lot in Singapore. And obviously, I’ve lived in Hong Kong for a long time. And actually, I was part of a government initiative in Singapore. That was the payments council. And it was very structured around giving advice and KPIs to banks and fintech to digitize to hit the government goal. And you’re right, that did not exist in Hong Kong. Very good associations, like the FinTech association of Hong Kong, created a collaborative environment for people to push for. And I do think the government is now starting to listen and move and I think post COVID Hong Kong has realized, oh, we have to be more innovative and a little bit more supportive for our next generation to grow through.
Okay, another interesting piece of government news that’s happened over the last 10 months, has been Hong Kong’s VASP licensing structure, and opening up to digital assets and digital asset hub for the future. Hopefully, Hong Kong is gonna retain or regain its position as a hub for, for crypto, and for any which virtual assets. What do you see that fitting into? You mentioned alternative options to invest in? And you mentioned diversification? Do you see that being part of Altive’s future? What’s your opinion on Hong Kong being a digital hub for the future?
Hardy: Yeah, I think that’s an interesting one. I think well there’s definitely a overlap between, say what we call tokenization slash blockchain versus what we’re doing and basically fashionalization of alternative investments. So the two actually match quite well to each other. The thing is… Well, well, it takes a lot… I can see definitely see later in five years time the tool will convert together. But then for now, I think it takes time for people to get comfortable with investing into token. And it takes time for people to get comfortable to invest into a private market. Mixing two things that.. who have been get comfortable together may not be the best thing to do at the at this point in time. And I am, for example, we have lots of our client, their family office, with a family office gatekeeper wanting to put 10% of the wealth into into token, I take that require some time for education. And I think both us and the other guys in the crypto world who has a set of shops in Hong Kong. We are all doing education for the public. And we do, we do think that, that pieces will come together.
Devere: Yeah, I agree with you. I think that Hong Kong is in a great position for this VAPS future. Simply because we’re such a huge traditional finance hub already. We’ve got great compliance here, HKMA has a very good reputation globally as being one of the greatest compliance offices. So I think if we open the market to the public, but do it with a compliance mindset, custodian mindset, the trust businesses that are already in Hong Kong, those guys diversifying, and basically making it a safer and feel more normal than it will extend into being a normal piece of just financial services. Over time. I agree with you. And I think Hong Kong is in a great place to, to push that forward. So as the world’s developing very quickly, what’s Altive’s plan? Do you have expansion plans outside of the SAR?
Hardy: Yeah I mean, we never imagined Altive would be just a Hong Kong only company. We, we do look to serve like clients from overseas, and we do invest like, like, the project from overseas as well. I guess that’s this, this natural form of our geographical expansion. On the other side, we also see how we can do more collaboration with, with other, with other participants, say, someone who is focused on the advisory piece, can we do a private market advisory piece together? Somebody’s focusing on public market? Can we work with them to do something like taking care of the whole portfolio for client, both public market and private market? So this is something that we think we will, It will be interesting initiative for us to, to explore.
Devere: Yeah, amazing. Well, that’s it, you know, this, this, obviously, we’re sitting in a regulated environment here under HKMA with in Hong Kong, but I feel the reputation that a business can have can then allow you to expand, that’s certainly the case with Payment Asia, we’re looking at different geos, and building out payment solutions in and around Southeast Asia. So all of that is done through partnerships, who are your key partners, or not that you have to name names here, but just talk me through the types of businesses that Altive collaborates with in order to execute the best in class solution.
Hardy: Yeah? Well, we’ve two sided marketplace, one is our investment resources, those are coming from either large GP, like …. basically you’re in the top 10 management in niche strategy, I think we talked to more than half of them to get investment opportunity. On the distribution side. I mean, there’s lots of traditional wealth manager or distributor that we help them to enable the access to private market for their client as well. That can range from private banks, as well as like traditional brokers, wealth managers, that they may not have the asset know how to touch this market. And obviously, we got a lot of friends in different startups, we always support the initiatives together.
Devere: Yeah, so you’re an asset to financial advisors, right. So a financial advisor in Hong Kong right now can utilize your platform and extend their reach for their clients. So I see that being that’s a partnership as well. Yeah, right. So you’ve got your large strategic partners that help you execute the business, but then you have your kind of channel, which would be these advisors and whatnot. Well, I see nothing but amazing opportunities in the future for Altive, what’s coming down the pipe, can you, can you give us any insights into some fun things that are coming that are Altive going to be part of, I imagine you’ll be part of the FinTech week in Hong Kong coming up pretty soon. How are things looking over the next two or three months?
Hardy: Yeah, we are going to launch more educational series. There’ll be more educational content on YouTube on our distribution newsletters all. FinTech Week is coming, we will definitely be there. While we tried to join as many like finTech activity as possible to promote the FinTech for Hong Kong, we do well organize a lot of networking event in our office, drinks for free. So feel free to come to us.
Devere: Drinks for free. That’s always a good sell. I think you can guarantee that some people that will be listening to this podcast might be hitting you up on LinkedIn Hardy to find out where to get those. Well, this has been an absolute pleasure. I’ve learned a lot. Hopefully the audience has learned a lot and we are delighted to know you guys. And we’re delighted that you’re in the market in Hong Kong, helping our public get access to these amazing opportunities to help build their future, build their wealth and stay safe and secure whilst doing it. So thank you so much Hardy Liu.
Hardy: Like I said, really enjoy the conversation Devere. Great to meet you. Yeah.
Devere: Amazing. Thank you, buddy.