Key Takeaways
- • Panellists at the Hubbis Investment Forum - Hong Kong 2026 agreed that approval alone does not secure capital in HNW and UHNW portfolios; a strategy must meet a portfolio need, have a credible funding source and fit client liquidity requirements.
- • New alternative allocations are typically funded either by fresh money or by reducing existing exposures, often fixed income, and any replacement must still perform the required portfolio function.
- • Macro and equity long-short hedge funds are attracting interest, while multi-asset and strategic funds help clients who prefer to delegate allocation adjustments to managers.
- • Fees, leverage, transparency and manager dependence can materially reduce client returns from private markets, and the illiquidity premium is harder to capture than before.
- • Evergreen and semi-liquid structures broaden access to private assets, but periodic dealing windows do not eliminate liquidity risk, and discretionary portfolios must retain enough liquidity to rebalance and meet cash needs.
Summary
At the Hubbis Investment Forum - Hong Kong 2026, a panel chaired by Brett Kennedy, Managing Director - Investments at Hubbis, examined what turns an approved investment into a meaningful allocation in the portfolios of high net worth and ultra high net worth clients. Panellists were Gabriel Chan of BNP Paribas Wealth Management, Juan Aronna of RBC Wealth Management, Connie Sin of Nomura International Wealth Management and Jacky Tang of Deutsche Bank's private bank. According to the publisher summary, alternatives are taking a larger role as private banks respond to the limits of the traditional stock-and-bond mix, but approval does not secure capital.
Panellists described clients as broadly willing to invest, with hedge funds, private assets, semi-liquid strategies and infrastructure discussed as additions to portfolios rather than wholesale replacements. The experience of 2022, when equities and bonds suffered unusually large losses together, was described as prompting renewed scrutiny of simple balanced allocations. Interest was particularly visible in macro-driven and equity long-short hedge funds, while strategic and multi-asset funds gained traction where clients preferred managers to adjust exposures across asset classes.
Panellists stressed that a fund passing legal, operational and investment due diligence does not automatically earn a place in every portfolio. Selectors must first define the portfolio problem, and new allocations require a funding source. Existing portfolios typically require a deliberate rotation, with fixed-income allocations cited as one source, and any replacement must be assessed against the strategic asset allocation framework rather than by labels alone.
On private markets, several participants questioned how much of the illiquidity premium reaches clients after subscription charges, management and performance fees, leverage costs and valuation effects. One panellist said that in some investments the illiquidity premium has shifted to a complexity premium, citing specialist company lending, niche infrastructure and less familiar real estate areas. Discretionary portfolio managers face additional constraints, as they need liquidity to rebalance and meet cash requirements. Evergreen and semi-liquid funds widen access, but redemption terms involving notice periods, gates and repurchase limits require careful reading.
Due diligence was described as testing the manager as well as the strategy, covering risk controls, valuation methods, conflicts, leverage and key-person dependence. Finally, panellists noted that relationship managers and investment counsellors need concise explanations and time to absorb training before introducing products, with targeting of clients facing a specific portfolio gap identified as more effective than broad distribution.
Panellists described clients as broadly willing to invest, with hedge funds, private assets, semi-liquid strategies and infrastructure discussed as additions to portfolios rather than wholesale replacements. The experience of 2022, when equities and bonds suffered unusually large losses together, was described as prompting renewed scrutiny of simple balanced allocations. Interest was particularly visible in macro-driven and equity long-short hedge funds, while strategic and multi-asset funds gained traction where clients preferred managers to adjust exposures across asset classes.
Panellists stressed that a fund passing legal, operational and investment due diligence does not automatically earn a place in every portfolio. Selectors must first define the portfolio problem, and new allocations require a funding source. Existing portfolios typically require a deliberate rotation, with fixed-income allocations cited as one source, and any replacement must be assessed against the strategic asset allocation framework rather than by labels alone.
On private markets, several participants questioned how much of the illiquidity premium reaches clients after subscription charges, management and performance fees, leverage costs and valuation effects. One panellist said that in some investments the illiquidity premium has shifted to a complexity premium, citing specialist company lending, niche infrastructure and less familiar real estate areas. Discretionary portfolio managers face additional constraints, as they need liquidity to rebalance and meet cash requirements. Evergreen and semi-liquid funds widen access, but redemption terms involving notice periods, gates and repurchase limits require careful reading.
Due diligence was described as testing the manager as well as the strategy, covering risk controls, valuation methods, conflicts, leverage and key-person dependence. Finally, panellists noted that relationship managers and investment counsellors need concise explanations and time to absorb training before introducing products, with targeting of clients facing a specific portfolio gap identified as more effective than broad distribution.
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