The private bank of Macquarie Group Ltd plans to double staff in the country in three to five years and ramp up in Asia as its clients warm up to redeploying their cash pile, the head of the business said.
Macquarie's private bank, the top wealth manager for Australia's rich, will raise the size of its fledgling Asian unit to up to 40 bankers in three years from six now, betting on the rapid growth, Guy Hedley told the Reuters Global Private Banking Summit.
"Asia Pacific is going to be the fastest growing market for the next number of decades," he said, adding the bank's focus was on Australia, North Asia and Southeast Asia now but will include India soon.
The private bank now has 70 bankers in Australia and another 30 in partner teams in the group.
Mr Hedley, who joined Macquarie nine years ago after stints in BNP Paribas and Goldman Sachs JB Were, said he sensed clients were readying to reduce their cash pile as confidence trickles back into the region, which boasts the world's tenth largest wealth populace.
Orthodox investment approach
He said while the historical recommended cash weighting was five to 10 per cent, clients were sitting on two to three times that level.
"In my 25 years in the industry, I have never seen this much cash sitting in the sidelines. But that is about to change," Mr Hedley said.
"2010/11 will be the year clients will again take an orthodox investment approach."
Mr Hedley declined to disclose the funds under management or the number of clients the private bank had but said it was the clear no.1 in the Australian market.
The Capgemini-Merrill Lynch World Wealth Report estimates there were 173,600 high-networth individuals with a wealth of $US519.4 billion in Australia at the end of 2009.
Macquarie's private bank focuses on clients who have between $5 million to $500 million, and with a resources boom in the country, the number is fast expanding, forcing the likes of Macquarie, UBS and Deutsche Bank to expand.
Mr Hedley said clients were now getting comfortable investing offshore, especially Asia, but preference was for hard assets such as commodities, infrastructure and private equity investments.
"It is Asia, we like Asia. There is a little bit of interest in the US but very little on Europe where things are lot more challenging."
The recent surge in the Australian dollar is emboldening clients to put money outside as they are relatively sure the rally is in its last legs, he said.
The Australian dollar was within striking distance of a two-year peak reached last week as the prospect of major central banks printing more money sparked a surge in commodities and higher-yielding assets.
It stood at $US0.9735 at 1758 AEST.
"Parity yes but it is unlikely going to go two US (dollar). So when it comes back they reap the dividends," Mr Hedley said.
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