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HSBC Asset Management creates specialist fintech investment arm

The asset manmagement arm of HSBC has launched a new venture capital investment strategy aimed at giving clients expopsure to companies that will participate in "the transformation of financial services".

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HSBC Asset Management creates specialist fintech investment arm

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The VC will typically participate in series A and B funding rounds of B2B companies which offer either software or financial services to enterprises or institutions with business activity in Europe and Asia.

Joanna Munro, CEO, HSBC Alternatives, says: “As part of our commitment to provide clients with exciting investment opportunities, this strategy will give them access to high growth sectors and parts of the world where economies are expanding fast such as the Greater Bay Area in China."

The strategy will be run by Remi Bourrette, head of venture & growth investments and director Kara Byun.

Says Bourrette: “We are interested in the tectonic changes of the industry, even more so when they relate to the role of finance in the economy and society in general. We believe the transition to ESG-driven finance will lead to the reinvention of many product lines creating a powerful tailwind for sustainability-native companies. We also see wealth creation in Asia as an enduring trend that will benefit technology companies across wealth management, capital markets and insurance.”

Last month, HSBC AM brought together all of its existing alternatives capabilities under a single business unit, HSBC Alternatives, with a 150-strong team and combined assets under management of $53 billion.

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Comments: (1)

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

Tectonic shift, customer centric, ESG ... HSBC is making all the right noises but why do I think this new fintech investment arm sounds exactly like the catch-all "Investment Banking SBU" I'd covered in BNPL Ain't Killing Banks. It's Making Them Rich that goes laughing all the way to the bank despite Fintechs eating the same bank's Retail Banking or Business Banking SBU's lunch? 

"Many banks invest in Fintechs, either directly or via VC funds that invest in Fintechs. Due to frothy valuations enjoyed by Fintechs, VC funds deliver 15-20% returns to their Limited Partners a/k/a Investment Banking divisions of banks. Therefore, whatever interest and fee incomes that are lost to BNPLs by the Retail Banking SBU of a bank are more than made up by the MOIC (Multiple On Invested Capital) earned by the Investment Banking SBU of the same bank."

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