Quamnet, a Hong Kong-based wealth management provider, is using the internet to build a private-banking network but to succeed it needs scale, and only mainland China can provide that. The numbers are required to makeáthe company an enticing vehicle into the Hong Kong/China market for potential acquirers.
Quamnet was founded three years ago by Bernard Pouliot, a Quebecois resident in Hong Kong for over 20 years. Among his entrepreneurial triumphs is Hong Kong's amateur ice hockey league, which he co-founded in the early 1980s with fellow Canadian û and now CSLA chairman û Gary Coull. Today Pouliot uses his own money to sponsor a team under the Quamnet colours.
He admits the original business model, which was to attract advertisers to the Quamnet website, hasn't worked. In the heady days of the dotcom bubble he envisaged ads would become half of the company's revenues; now they account for around 15%. So in July of this year, Quamnet turned to a subscription model, charging a modest HK$175 per month for use of its advanced services.
The site is meant to provide highly tailored advice and other services to high-middle class users with $1 million in total assets. Its services include broking, mutual funds, warrants, insurance and investor relations. It is aimed at the lower end of the high-net worth market, above retail but not the super-rich who would use a traditional private bank. Pouliot plans to branch into providing advice about alternative investments and, some day, even art collecting. "Wherever clients are putting their money, I want to be able to help them," he says.
Quamnet has so far won 3,000 paying subscribers, about 75% of whom are based in Hong Kong, and now that several banks are beginning to offer their customers a Quamnet subscription as part of their own packages, Pouliot hopes to hit 5,000 by the end of the year. He says it is a good start but Quamnet has a long way to go. Pouliot reckons the Hong Kong market is around 250,000 customers, based on the number of investors in the Tracker Fund. He hopes to attract 10-15% of them as Quamnet subscribers.
That still isn't enough. "I need 100,000 subscribers," Pouliot says. That would be a huge database of people serious about investing and receiving good advice. It would be enough, he reckons, to make Quamnet an attractive buy for a foreign bank or other financial institution looking to break into the market.
To realize that ambition, the service is exploring opportunities on the mainland to be a value-added window to the Hong Kong market. Pouliot says mainlanders have enough information already about the A-share market û although Quamnet is building its A-share expertise as well û but don't have good, tailored advice for the Hong Kong market.
