River Delta Wealth Management: Stability and Flexibility in Global Asset Allocation

The year 2024 remains one of turbulence and transformation, with the global landscape continuing to evolve. This year has witnessed national elections in approximately 80 countries, encompassing nearly 4 billion people, underscoring its significant impact on global politics. Among these developments, Donald Trump's re-election as President of the United States is expected to profoundly influence the global political environment, reshaping geopolitical dynamics, international alliances, and trade relations.

Although the global economy has maintained moderate growth, most major economies outside the United States are showing signs of fatigue, and the United States itself is gradually entering the late stage of its economic cycle. Looking ahead, the global economy faces heightened uncertainty and challenges amidst complex geopolitical rivalries. The coordination of economic policies and the management of market risks will become increasingly critical. Moreover, as technological advancements have yet to fully translate into productivity gains, competition among major nations in various fields continues to intensify. The United States and China remain leaders in artificial intelligence research and advanced manufacturing, each unveiling innovative breakthroughs with far-reaching implications. This rivalry extends into other technological domains, exacerbating geopolitical tensions. The United States seeks to maintain its dominance in technology by restricting China's access to cutting-edge innovations.

In this dynamic and complex global environment, the challenges of investment have significantly increased. Optimizing global asset allocation to effectively diversify risks, navigate market volatility, and achieve more stable returns has become a primary concern for investors. In the future, innovative investment strategies and keen market insights will undoubtedly be the keys to overcoming these challenges.

This past May, UBS hosted the 27th Asia Investment Forum in Hong Kong, attracting nearly 2,000 senior representatives from global institutions, sovereign wealth funds, family offices, and private equity firms. Many of the world’s top investment experts shared their insights on global asset allocation strategies.

One of the panel speakers was Jan Yang, CEO of River Delta Wealth Management. River Delta, among the first licensed family offices in Hong Kong, is headquartered in the city with additional representative office in Shanghai. The firm’s assets under management (AUM) have exceeded USD 300 million. Jan Yang emphasized that River Delta has, from its inception, adhered to a long-term, forward-thinking investment philosophy. For the firm, the assets it manages prioritizing low volatility and strong liquidity over aggressive returns. This conservative approach aligns closely with the risk preferences of ultra-high-net-worth clients, whose primary goals are capital preservation and steady growth.

River Delta Wealth Management strictly follows a disciplined Strategic Asset Allocation (SAA) framework, ensuring that every investment aligns with its risk management and diversification principles. This rigorous approach underpins the stability and predictability of its portfolio.

Jan Yang elaborated that fixed-income assets constitute the cornerstone of River Delta's SAA, providing necessary liquidity and mitigating volatility. The other half of the portfolio is dedicated to hedge funds, designed to generate alpha through diversified strategies. This balanced approach minimizes investment risks while supporting steady asset appreciation. Direct investments and other alternative assets account for less than 10% of the total AUM, underscoring the firm’s prudent and conservative investment style.

In September, River Delta leveraged its expertise in global asset allocation, particularly its experience in hedge fund portfolio management, to launch a USD-denominated Fund of Hedge Funds (FoF). This FoF is designed to provide clients with high-quality investment opportunities in hedge funds, focusing on the flexible allocation of hedge funds situated in major financial centers worldwide, striking a balance between risk and return.

The fund employs a "Core-Satellite Strategy" for its investment allocation. Core holdings focus on hedge funds selected for their ability to deliver relatively stable, long-term returns with very low, near-zero correlation to the markets, consistently generating alpha regardless of market conditions. Meanwhile, smaller satellite positions are tactically and flexibly adjusted based on market dynamics to seize specific opportunities. For example, in 2020, the portfolio increased its allocation to macro-strategy hedge funds, while in 2023, it favored hedge funds with low market beta exposure.

Regarding geographic and sectoral diversification, Jan Yang highlighted that the portfolio is globally distributed with an approximate 50/50 split between the United States/Europe and Asia/Greater China. This strategic allocation allows River Delta to diversify across major markets, capitalizing on growth opportunities in the United States while leveraging its deep expertise in Asian markets.

River Delta's coherent and adaptive investment strategy enables it to navigate market changes effectively, delivering greater value and enhanced opportunities for its clients.

This year, UBS published its 2024 Global Family Office Report, surveying 320 single-family offices across seven regions. The report highlights the Asia-Pacific region as a burgeoning investment hotspot, with nearly half of the family offices in the region planning to increase their asset allocations in Asia over the next five years. As a leading international financial hub in Asia, Hong Kong is well-positioned to benefit from this trend.

River Delta Wealth Management, holding Hong Kong’s SFC Type 4 and Type 9 licenses, is committed to leveraging its expertise in investment allocation. The firm offers top-tier advisory services and supports its clients in building professional, globally diversified investment portfolios, helping them achieve sustainable and robust growth.

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