Singapore Family Office Hoards Cash Amid China-U.S. Tensions
(Bloomberg) -- Kamet Capital Partners Pte, a Singapore-based family office that invests on behalf of wealthy Chinese, said it’s hoarding cash as it waits for global asset prices to deflate amid geopolitical tensions and tighter U.S. monetary policy.
The firm plans to maintain its cash holdings at about 40 percent of assets under management, Kamet Chief Executive Officer Kerry Goh said in an interview. That’s an ultra-conservative position by the standards of the fund management industry, where cash holdings of 5 percent or less are common, according to the latest monthly survey by Bank of America Merrill Lynch.
“There is rising probability of a correction,” said Goh, 46. Superpower rivalry between the U.S. and China, together with the unprecedented unwinding of the Federal Reserve’s quantitative easing program, are combining to create an uncertain picture for wealthy investors, he added.
Kamet manages assets for two Chinese ultra high net worth individuals. Goh said he opened the family office last year for the first client, who sold part of his Chinese fashion-accessory firm to a European company. The second is an entrepreneur who co-founded a technology unicorn which was later sold to a larger Chinese firm, Goh added. He declined to name the investors.
Kamet’s cautious approach to markets also explains the firm’s investment in accommodation for Yale and other U.S. universities, Goh said. Demand for student housing is seen as relatively immune to financial downturns.
Those and other private assets make up the second-largest category of Kamet’s portfolio after cash, Goh said. The unlisted firms in which it has invested include Singapore-based Internet provider MyRepublic Ltd. and startup Doctor Anywhere, reflecting its interest in disruptive technology firms and the healthcare sector, Goh added.
Goh declined to disclose the level of Kamet’s assets under management, though the firm’s license limits the total to S$250 million ($183 million), according to its registration with the Monetary Authority of Singapore. Kamet is seeking a capital-markets services license from the MAS, which would lift the limit, Goh said.
Goh, who worked previously at Julius Baer Group Ltd., currently heads a team of 14, compared with half that number when Kamet started last year.
In better times, Kamet would be prepared to use leverage to increase its investment exposures and multiply yields, said Goh. But for the moment, caution is the watchword.
“We need to be conservative and focus a lot on risk management," Goh said. “If we can take good care of the downside risks, the upside will take care of itself."
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