Change brings with it opportunity, and the twist of fate that would lead recent Aussie law graduate, Rachel Huf, to relocate to Hong Kong nearly three decades ago, offered both in abundance.
Arriving in 1996 – less than a year before Hong Kong’s sovereign handover from Britain to China – Huf (pictured) made her first foray into investment banking at Bankers Trust, where she delved into the world of derivatives before developing the on-the-job acumen and adaptability that would render her fit to navigate the repercussions of the 1997 Asian financial crisis.
Following Deustche Bank's acquisition of Bankers Trust in 1999, Huf cut her capital markets teeth through assignment as a lawyer within the firm’s equities business. Further expanding her remit to provide legal support to the global markets team, soon she was well-equipped with the skillset required to embark on broader capital market roles.
Fast-forward to permanent residency and in 2004, Huf moved to Barclays as head of legal for Hong Kong, where she gained management experience alongside the London-headquartered bank’s pursuit of Asia-focussed growth: its Alpha Plan. With her responsibilities extending by region and continent, she also became a vocal advocate for diversity, equity and inclusion (DEI), initiating the bank’s Women’s Initiative Network (WIN) in Asia as a co-founder, and becoming an executive sponsor for Spectrum, the bank’s LGBTQ+ network.
With a career at Barclays spanning 19 years (and counting), Huf describes her workplace as a great cultural fit. Her promotion to chief executive of Barclays’ Hong Kong business follows Anthony Davies’ retirement. She takes on the position alongside her role as the bank's general counsel for Asia Pacific.
FA: What prompted you to pursue a legal career in banking?
Huf: When it came to deciding on what to study at university, law appealed from the perspective of being very interested in rights – people's rights and understanding the framework of society. I was a bit of an idealist: as a young lawyer, I was very much focussed on rights and justice. But it was moving to Hong Kong that marked the genesis of my financial legal career. My relocation to the Special Administrative Region (SAR) was never intentional. It was a happy accident following a period of backpacking around South America!
After completing my law degree in Queensland, Australia, I articled for a couple of years in a law firm. Upon deciding that it wasn’t for me, I convinced my boyfriend at the time to go travelling. Following a stint in Latin America, we ended up in the UK in the depths of winter, where we planned to earn to fund more travel before returning to Australia. But, unimpressed by the weather – coupled with the limitations of working holiday visas – when he received an offer to relocate to Hong Kong, I followed suit.
Upon arrival, I met with a recruitment firm that opened my eyes to the idea of working for a corporate in-house, rather than a law firm. I started in an investment bank and found it to be incredibly interesting.
FA: Which of your early career milestones proved to be most formative?
Huf: Coming to Hong Kong was certainly one of them. I arrived in 1996, just before the handover, and the energy of the city and its prominence as Asia’s leading finance hub was palpable.
So too was my job in the city at Bankers Trust, which offered me the chance to learn about the world of derivatives. The company was a great place to be as a young lawyer entering finance. In fact, it was colleagues based in New York, who were shaping the development of derivatives and defining industry standards.
However, a few months into the job, the Asian financial crisis hit. That was a really formative experience, because Bankers Trust had a lot of exposure around Asia Pacific – especially in Indonesia and Korea – and I ended up being put on the restructuring portfolio.
It was exciting: day in, day out, you couldn’t predict how things were going to transpire. While many of my US-based mentors were market experts, several of them hadn’t experienced this scale of downturn before, which meant we were learning together. Early on, I was educated on what can go wrong in finance, as well as how to work things out practically and cross-border.
Of course, in the absence of email as an option for delivery, actions as fundamental as serving a notice on a client in order to close out a position proved more complex in practice! This was further exacerbated in the context of dealing with different cultures and approaches.
Collaboration is key and has become a prominent theme in my career. When Bankers Trust merged with Deutsche Bank, cooperation was vital in order to deal with organisational upheaval and to adapt to a new corporate culture successfully. I had to get up to speed with new policies and practices quickly.
This all fits in with what I find so fascinating about my longstanding base in Asia: the opportunity to deal with many different cultures, as well as legal and regulatory systems.
FA: Which of Hong Kong's unique qualities do you feel have contributed to its prominence among Asia’s capital market?
Huf: I think what’s unique to Hong Kong is its role as a gateway to mainland China, particularly for the international business community. Hong Kong’s unique qualities include its rule of law – which offers commercial market participants certainty of outcome; its regulatory environment – its lack of capital controls enable funds to flow freely; and its tax regime. A lot of factors make it very attractive to people who want to use it as a hub for the region and particularly for its connectivity to mainland China, which goes both ways.
We’re currently seeing an acceleration and enhancement of this connectivity, through Hong Kong’s connect schemes, wider renminbi internationalisation, and China’s removal of limits across foreign ownership of entities, such as securities companies and asset management firms. As China continues to open up its financial markets, we’ll see more international participation via Hong Kong.
FA: What's your view of Hong Kong’s changing legal environment?
Huf: Commercially, Hong Kong’s rule of law remains. And, if you look at independent sources such as the World Justice Project, the market ranks highly.
FA: What excites you about your new role as leader of Barclays’ Hong Kong business?
Huf: Taking on this new role allows me to get even closer to the business that I've witnessed evolve for the past 19 years in Hong Kong.
I'm really excited about the way the business is growing and its focus. We continue to concentrate on organic investment – even during Covid-19, the Hong Kong office grew by around 20%. Our business model leverages the strength of our global platform: we offer international products to Asian clients and provide global clients with access to Asia Pacific markets. In the post-pandemic environment, increasingly Hong Kong is facilitating international impact.
My strategic priorities across coming months will involve continuing to execute on initiatives to serve our clients and fostering a collaborative culture across the organisation, which will help us achieve our objectives. This links to our diversity, equity and inclusion (DEI) effort – which I'm closely involved in.
FA: Barclays has been active in Asia for 50 years. What role does Hong Kong take on within the bank’s regional presence?
Huf: Hong Kong is vital to our Greater China business. It’s our most significant physical base in the region alongside a branch in Shanghai, a representative office in Beijing and the re-establishment in November 2022 of our Taiwanese securities business.
Elsewhere in Asia, we have an office in Singapore, a significant presence in India, and offices in Tokyo and Australia. Hong Kong constitutes the regional hub for a number of our divisions, including equities, credit and investment banking.
FA: How does Hong Kong’s regulatory landscape compare to that of its Asia-based peers?
Huf: The Hong Kong regulators are doing a great job, especially in terms of their focus on current key themes, such as digital disruption, virtual assets and environmental, social and governance (ESG) factors.
Given the nature of Barclays’ business as a corporate and investment bank, ESG is the key focus for us. Disclosure is the area that has seen the most recent progress, with advances by the Task Force on Climate-related Financial Disclosures (TCFD) and publication last June of the International Sustainability Standards Board’s (ISSB) inaugural guidelines.
Hong Kong’s regulators have been the first in Asia to mandate alignment with TCFD standards by market participants. The target is 2025 and will provide real business opportunity. Looking at China’s energy transition and its ongoing dual carbon initiatives, the mainland requires approximately Rmb100 trillion ($14 trillion) in investment to achieve its climate goals and Hong Kong will extend access to the international capital required to support this.
Barclays has a strong sustainability capability and at the end of October 2023, we appointed Denise Wong to lead sustainable and impact banking across Asia Pacific. Her experience and purpose aligns with our efforts to support clients’ transitions.
FA: How will you work together to ensure that the Hong Kong business contributes to Barclays’ transition to net zero?
Huf: Globally, Barclays is very committed to this space and our efforts reflect those of the wider industry. As a firm, we're on a journey and Denise and the team in Asia Pacific will advance our regional progress.
I’ve already mentioned disclosure, but there’s also the issue of taxonomy – defining what’s green and what isn’t. There needs to be universal alignment on what this constitutes and I’m interested in participating in both the regional and global conversations around this.
Additionally, there’s the issue of transition, which is particularly important for emerging markets in Asia Pacific. How to operationalise successful transition remains tricky. There's a lot to achieve in this area that we can help clients with.
FA: Recent years have witnessed increasing geopolitical tensions. What do you make of the current international business environment?
Huf: Globally there’s a lot to consider across the geopolitical space. It’s about navigation and that’s something we’ve been successful with so far. Our focus is on the long term and we’re committed to navigating challenges as they arise.
FA: How do you view recent activity and what’s your outlook for 2024?
Huf: Across the market, transaction volume on the advisory side generally has been down in 2023. We think that there will be more opportunity in 2024, as the interest rate environment stabilises, led by the Fed. Business will make a comeback and for M&A, certain sectors offer some green shoots, such as China’s low-tech industrials and consumer sectors.
There’s been a lot of activity in Japan over the last year, partly due to the need to diversify, which is something that is likely to continue. Japanese equities have been able to deliver attractive returns amid challenging conditions elsewhere.
India has also seen an uptick in international interest – the market’s legal and regulatory landscapes have become more accommodative to foreign participation. You need people who know how to navigate India – it’s a market where we have a deep presence and the capability to do so.
There has also been increased interest overall in US dollar product in Asia Pacific. I see these areas as continuing to offer opportunity across 2024.
This article first appeared in Volume One 2024 of FinanceAsia's print magazine. You can read the online edition of the magazine here.
