Tuck Meng Yee has more than 20 years’ experience in investment management, spanning private banks (ABN Amro and Citibank), investment banks (JPMorgan, UBS), and fund services (Moore Management)
Now CIO at Singapore-based family office JRT Partners, where he oversees a multi-asset portfolio including hedge funds, he has built a reputation as one of the Asia-Pacific (APAC) region’s more vocal proponents of digital assets – eyeing, as he puts it, an opportunity to “seize the market.”
Ahead of next week’s Hedge Fund APAC Digital Assets Summit, Hedgeweek spoke with Yee about his role at JRT and the wider challenges facing digital asset investors.
Hedgeweek (HW): Hi Tuck, thank you for joining us today.
Tuck Meng Yee (TY): Happy to be here!
HW: Welcome to our chat. Let’s get straight to it: In the past few months, there’s been a rise in the Chinese family office investment in Singapore – what’s significant about this?
TY: Traditionally, Hong Kong has been the location of choice for Chinese family offices, but recently, with the desire to find a true offshore base for their international portfolio and given the political developments of the past few years, it is now clear these family offices see Singapore as their preferred choice.
None of them are closing Hong Kong offices per se, but nor are they treating Singapore as a national office or satellite office – they are treating it as their main international office. And that, I think, is a game changer. Singapore is truly becoming an international centre in the APAC region.
HW: Speaking about APAC, what have been the biggest drivers of recent growth when it comes to your Asia-focused portfolios?
TY: For us, it’s been China. The evolution of technology – and the technology supply chain ecosystem – in China, and Asia more generally, has driven a lot of growth. The supply chain with Australia has also been very good for us. This encompasses not just what goes into technology, but also the raw materials that go into real estate, infrastructure, and such.
Looking at the supply chain going forward, and considering geopolitics and deglobalisation, we may have to look at APAC more widely, beyond just those two countries [China and Australia] – and perhaps start looking at countries in South and Southeast Asia.
HW: And how would you say regulation is influencing players in APAC, across the whole value chain?
TY: Every single player is doing its best to attract investment, and to be as transparent as possible. I think Singapore has been the most consistent in terms of foreign investors, and companies are confident it is a good long-term base, particularly for service industries. And in terms of the investment management industry, it’s continued to develop legislation to make it as fast and as free as possible.
HW: You’ll be speaking at the Hedgeweek APAC summit on digital assets in Singapore this month. How has JRT positioned itself when it comes to digital assets?
TY: We have a portfolio of digital assets – cryptocurrencies, essentially – and use these investments to ensure we’re on top of that part of the FinTech universe. You can read about crypto assets all you want, but only when you are dealing in them, owning them, and lending them at scale do you understand the issues. It is a frontier market – which means frontier market risks and returns.
Yee’s bullishness towards digital assets puts him at odds with many fund managers, including a significant proportion of hedge fund professionals. A Hedgeweek survey from Q2 2023 – featured in our April Insights Report, Turning point: The new technologies helping hedge funds evolve – found that many hedge fund COOs were wary of the likes of AI and blockchain, with patchy uptake. The report found that 33% of hedge fund firms used blockchain technology to improve performance, and 14% used it to improve operational functionality.
HW: How has interest in digital assets from institutional investors changed in the past twelve months – and where do you see it going?
TY: I’d rather speak in terms of the last few years. Even through the Covid pandemic, there has been increasingly strong interest in digital assets. Of course, it comes from a very low base, but it hasn’t really wavered. Most family offices, institutional pension plans, fund Managers, hedge funds, private equity managers, trading houses – all of them are increasingly carving out a team or a part of their portfolio to have some exposure to digital assets.
Obviously the more conservative players aren’t involved yet, but anyone that can afford the resource is doing some research on digital assets. Most people, I think, are doing it right – which is, they’re saying, ‘this is interesting, but maybe not interesting enough for us to materially carve out a place for it in our portfolio’. We want the variability to drop. We want more regulation and more protection – and when it’s there, we will be on top of it, as opposed to someone who is maybe behind the curve.
Everyone is doing something, even though some of them may be doing it at a smaller scale. It’s not just crypto natives that are showing interest.
HW: You’ve previously mentioned that asset tokenisation is not living up to its potential. How does that change?
TY: It starts improving when you’ve got trust – and find players who take it up. When firms like Franklin Templeton or UBS come up with tokenised versions of money market products, investors trust them – they may not understand blockchain, but they trust these types of firms.
People need good experiences with tokenised assets to reduce their aversion and improve trust. They also need to see the benefits that technology brings – the fact that an asset is tokenised doesn’t mean anything in itself if it is exactly the same as a normal fund. There must be increased benefits, whether it’s faster processing or lower fees. And I don’t think we are seeing any of that just yet.
HW: How are you and JRT working towards the eventuality that the market expands?
TY: The whole reason we want to keep resolution with the digital market is to make sure we have invested enough of our portfolio that we are quickly able to seize the market when it becomes more accessible to traditional players. That will happen when regulation comes into play.
HW: And finally…. what would you say are the biggest challenges facing the digital assets industry, and how could they be mitigated?
TY: Credibility. It’s the biggest challenge. Some of the world’s largest crypto exchanges have gone bust. Some of the world’s largest crypto hedge funds have gone bust. It’s a problem. Imagine the same thing happening in the traditional financial system, it would be gridlock. The crypto industry has gone through exactly that.
There is a very low level of trust and transactions. Credibility can be restored if people feel they have access to legal protection if something goes wrong, and right now it is a limited possibility, as the industry is by and large unregulated.
Tuck Meng Yee is among the many digital asset experts speaking at Hedgeweek’s APAC Digital Assets Summit in Singapore on 12 October. The event is primarily for senior professionals at digital asset investment managers. If you would like to learn more about the event or apply to attend, please click here.