Pursuing passions: how HSBC steers private banking clients towards acquiring trophy assets through credit advisory solutions

A paradigm shift in the lifestyle and investment strategies of ultra-high-net-worth (UHNW) individuals has led to a growing interest in the acquisition of luxury assets, such as superyachts, private jets and highly collectible art.

These assets, while generally recognised as valuable holdings, do not typically generate a traditional return on investment. However, a significant motivator behind their acquisition is a reassessment of core life values. “Art is a quintessential passion asset,” says Jyrki Rauhio, regional head of credit advisory, Asia-Pacific, HSBC Global Private Banking. “Our clients are often led by the heart rather than just their head. These assets reflect individual choices in how they want to spend their time and resources.”

Alternative value

The market for certain trophy assets was positively impacted during the pandemic, when ownership of a private luxury yacht, particularly in Hong Kong, made for an alternative vacation amid global travel restrictions. While interest in yachts has levelled, the desire to own a private jet is gaining momentum among HSBC’s UHNW clients – who the bank describes as increasingly sophisticated with assets, businesses and family members spanning multiple continents.

Rauhio says that while the market in the United States for private jets – the largest – continues to grow at an aggressive pace, in Asia the interest is certainly there. “While we have in the past had some hindrances – we don’t have a huge number of private airports here and we don’t have a lot of hangar space – this space is developing quickly. Private aviation is one of those things that will continue to grow strongly in Asia. Given the distances and geographical complexity of the region and its many islands, it is a natural place to use a private jet” he says.