Christine Dobby
Tue, January 16, 2024
(Bloomberg) -- JPMorgan Chase & Co. is building up its Canadian asset management team, with new hires planned for Toronto and Montreal, as it looks to tap into growing demand from the wealthy for private investments.
The bank is working on creating new alternative-investment products to offer to major wealth management firms in the country in the first half of this year. High-net worth individuals are the bank’s ultimate target, Travis Hughes, who heads JPMorgan Asset Management in Canada, said in an interview.
The bank’s Canadian asset management division is relatively small — it has about C$36 billion ($26.8 billion) under management and primarily serves institutional investors. But Hughes, who has been in the role for two years, said he’s trying to fill a need.
“If you look not only in the US but in Europe, Asia, Latin America, Australia, there has been a concentrated push to bring these private alternatives to individual investors,” he said.
Private assets represent about 1% to 2% of Canadian retail investors’ portfolios, Hughes estimated, while that same figure is at least 6% or 7% in the US. “We’re hoping to be in the early days of the growth of the asset class in Canada.”
JPMorgan hired Jay Rana, a former senior vice-president at Pacific Investment Management Co., to help run its Canadian adviser business and Hughes said other new additions will follow this year, mainly in the country’s two largest cities.
Canadian financial players are also angling to sell clients on private credit, private equity, real estate and other alternatives to stocks and bonds. Bank of Nova Scotia, for example, said in October it was partnering with Sun Life Financial Inc.’s asset management business to offer private alternatives. Last year, Royal Bank of Canada’s wealth division absorbed a number of employees from Onex Corp. and agreed to carry the latter’s private funds.
Hughes observed that there’s growing competition in Canada from global asset managers. Morgan Stanley expanded its wealth management business in the country in 2020, while Blackstone Inc. increased its presence by establishing a real estate office in Toronto and hiring Janice Lin to run it in 2022.
Private assets can be challenging to sell to individual investors, with less liquidity, opaque fee structures and infrequent valuations compared with public securities.
JPMorgan’s Canadian offerings will be similar to what it offers clients in the US, which includes private equity, real estate and infrastructure investments, with features such as lockup provisions and minimum investments tailored to retail investors, Hughes said.
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