DBS Records 300% Jump in Semi-Liquid Fund Sales in Greater China as Investors Seek Higher Yields and Diversify into US and Europe

DBS reports a 300% increase in semi-liquid fund sales in Greater China due to a high demand for returns. DBS notes that Chinese private banking customers have moved away from investments centered on equity, instead opting for increased involvement in US and European markets.

DBS Group, the largest banking conglomerate in Southeast Asia, experienced a surge in sales of its semi-liquid fund products in Greater China this year. They anticipate that the demand will continue to stay strong as investors increase their investments in alternative assets.

Sales of semi-liquid funds to investors in Greater China have skyrocketed by 300 per cent compared to last year, according to Carol Wu, the North Asia head of private banking at DBS, in a recent interview. The bank stated that these investment products, some of which promise double-digit returns and clearly outline risks to investors, are handled by asset management firms such as Apollo Global Management, KKR and Brookfield Asset Management.

Semi-liquid funds, which are somewhat backed by private assets, provide more regular chances for redemption compared to close-ended funds. This enables DBS to market products to professional investors that were once only accessible to institutional investors.

Semi-liquid funds are designed to align business' financing needs with enduring sources of funds, however, they may have to offload their core assets if they encounter a high volume of redemption requests. This risk was underscored by a spike in client redemptions for Blackstone's real estate fund roughly two years ago.

Most of DBS's private banking customers, who invest in private equity items, have a preference for semi-liquid products that they can access every three months, according to Wu.