HSBC

  • Private Bank

The Charities and Education team within HSBC Private Banking delivers a bespoke relationship management service, with experienced specialists who look after charities, educational organisations and not-for-profits. We provide a tailored, flexible solution that exceeds our clients’ needs and expectations. HSBC maintain a clear commitment to the charity sector through numerous volunteering programmes, strategic partnerships and educational courses. We are proud to be part of a team of talented ind

  • Operates: London
  • Based: Global
  • Founded: 1865
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About HSBC

The Charities and Education team within HSBC Private Banking delivers a bespoke relationship management service, with experienced specialists who look after charities, educational organisations and not-for-profits. We provide a tailored, flexible solution that exceeds our clients’ needs and expectations.

HSBC maintain a clear commitment to the charity sector through numerous volunteering programmes, strategic partnerships and educational courses. We are proud to be part of a team of talented individuals who are passionate about the charities sector and the vision many of our charitable clients promote.

We aim to act as more than simply an investment advisor and our clients see us as trusted partners. We like to take a holistic view of each client relationship to find the best solutions from across HSBC to enable them to prosper. Our clients particularly value the education process, where we work with trustees and committees to deepen investment knowledge – whether it’s at a basic level or more technical.

With our track record and experience in the charity sector, we believe that we are well placed to support clients to achieve a long and sustainable future.

Discretionary investment management:

• Delegate the management of your portfolios to dedicated specialists

• Take advantage of our global expertise and reach without the need for involvement in the day to day management of the portfolio

• Find the optimal investment solution that fits your specific investment objectives and risk tolerance

• Our discretionary services give charities a diversified, strategic exposure to a wide range of assets designed to maximise returns within targeted risk parameters

• We run charity specific mandates to enable clients to benefit from the best of HSBC’s thinking, with the ability to customise holdings and asset allocation as needed (subject to minimum criteria). This has included entirely removing fossil fuels on an indirect basis and using equities focused on supporting the UN SDGs.

• We integrate ESG into our investment process for all portfolios; can apply ethical restrictions in line with your charity’s investment policy and build a sustainable portfolio for you.


Specialist charity services:

• Lending against the client’s investment portfolio, enabling flexibility with the client’s balance sheet and access to liquidity

• Support with investment policies

• Investment training for Trustees, Finance teams and Committees

• Cashflow planning on the client’s investments, enabling the client to understand the long-term impact of drawing funds from their portfolio

• Access to thought provoking investment and charity-specific events

• Insight, experience and connections from the Commercial Banking Charities Sector team who help +100,000 charity clients

Advisory & execution only:

• Institutional platform which means we can advise on a range of asset classes to fulfil specific and complex investment requirements, or trade on the client’s behalf

• Access to a wide range of asset classes, including private equity, single stocks, bonds, FX, structured investments, hedge funds, and real estate

• We combine the institutional market-leading technology of Aladdin Wealth with the capabilities of HSBC Group in a manner bespoke to the client’s investment needs and circumstances

Charity funds offered

Available products and minimum investment by fund type.

Segregated mandate

£5m

Minimum investment

  • Charity clients151
  • Total assets£2.59bn
  • Advisory
  • Discretionary
  • Execution Only

Investment approach

Philosophy

All of our discretionary investment teams share a common philosophy - our core investment belief is that good governance, clear investment conviction and a well-executed process are key. Adherence to this philosophy ensures consistent, repeatable outcomes for our clients.

Our fiduciary duty to our clients comes first and underpins everything we do. We believe that environmental, social and governance factors affect the value of most assets. The degrees of materiality vary and change, however, strong management of ESG issues should positively impact a company’s long-term valuation or a country’s attractiveness. That is why we systematically integrate ESG analysis into our investment processes and actively engage with our holdings.

Our multi-asset investment philosophy is based on the belief that:
 Markets are inherently inefficient over the short and medium term:
 Asset prices exhibit excess volatility, relative to fundamentals, often leading to market mispricing
 Markets can, however, be expected to revert to a measure of ‘fundamental value’ over the long term
 We believe active asset allocation based on valuation can exploit this market overreaction and mean reversion
 Asset allocation is the key driver of portfolio return and must be dynamic

We therefore aim to develop:
 Robust valuation metrics to review the long term return potential on all available asset classes on an on-going basis
 An investment strategy that is adjusted accordingly, shifting portfolio allocations towards asset classes with the best prospective risk-adjusted returns
 Fulfilment that aims to capture the beta characteristics of the targeted asset classes on a cost efficient basis
To achieve this, we:
 Use asset valuation tools in a systematic way to project future asset class returns
 Construct a dynamic asset allocation policy to exploit shifts in prospective returns across assets
 Employ a robust optimisation process and a disciplined rebalancing of portfolios
 Carefully manage portfolio risk as well as return potential
 Choose the most efficient instrument for execution from a risk, return and cost perspective

Asset allocation

Portfolios are managed with reference to a long-term Strategic Asset Allocation (SAA). The SAA is determined by reference to our views on the optimal long-term allocation between the relevant asset classes consistent with the client’s risk profile. The SAA is reviewed at least annually and is dependent on prevailing market valuations, volatility and other factors.
The tactical positioning of the portfolio (i.e. its positioning at any given time relative to the SAA) is actively managed with the aim of managing short to medium-term investment opportunities and risks. This means that we will review the portfolio periodically and may make short to medium-term adjustments to the allocation between the specified asset classes, as well as to sectors, geographies and other relevant themes.
We will aim to keep the tactical positioning of the portfolio consistent with the level of risk deemed suitable for the client’s risk profile in the prevailing market conditions.
There are no quantitative limits on the allocation between specific asset classes. This is designed to ensure the asset allocation of the portfolio can adapt to changing market conditions and, in extreme circumstances, fundamental shifts in asset class risk and return characteristics. However, for the avoidance of doubt, the portfolio will at all times be managed to an asset allocation that is consistent with the agreed risk profile.

Allocation decisions

We would invest through a blend of direct equity positions and collective funds to give a balance of diversification. Asset classes which may be considered include:
 Equities - domestic and international
 Credit - domestic and international corporate and high yield bonds
 Government bonds (developed market, government/sovereign, quasi-sovereign, supranational issuers) - domestic and international
 Emerging market bonds (government/sovereign, quasi-sovereign, supranational issuers) – hard and local currency, government debt
 Alternatives – hedge funds and listed real estate
 Liquidity - funds and cash
Rationale - Efficient access to underlying asset classes
When selecting the appropriate fulfilment method, there is a strong focus on identifying the most efficient way of implementing the desired approach, both in terms of beta capture and cost. We believe that asset allocation is the key driver of returns and that fulfilment should capture the volatility characteristics of an asset class in a cost-effective manner.
For equities, we invest directly into global market listed companies and via HSBC ETFs or other pooled vehicles, in order offer adequate diversification and implement tactical views. We are currently using an iShares hedged global equity position to allow for currency hedging.
In the other asset classes, we tend to invest in pooled vehicles on either a passive or actively managed basis.
When choosing the underlying portfolio holdings for our multi-asset strategies, our portfolio managers also focus on competitive fees, governance and transparency for all funds, whether internal or external. In general, there is a preference for HSBC managed products as we can access them with no management fee.

Risk management

When assessing risk, our preferred measures to help clients to assess their portfolios are:
 Expected shortfall - a measure of tail risk. It is an estimate of the average portfolio loss over 1 month in the worst 5% of months of the last 10 years.
 Volatility - a risk measure of future dispersion of returns for a given portfolio and is expressed in an annualised percentage.
We establish these metrics through completing a detailed Account Risk Profile Questionnaire (ARPQ). This will determine which risk band is appropriate for the client’s investments as well as document any other investment related requirements the client may have e.g. income requirements, ethical policy etc.
We update this document with the client at least on an annual basis to ensure ongoing suitability of the recommended portfolio.

Example performance

HSBC Charities Dynamic (Direct Equity) Portfolio GBP (Net of Fee, as at 31 January 2025): 1 year 15.9%, 3 year (annualised) - 6.2%, 5 year (annualised) - 7.5%, 10 year (annualised) - 6.5%.
Volatility: 1 year - 6.51%, 3 year (annualised) - 8.22%, 5 year (annualised) - 10.52%, 10 year (annualised) - 9.39%

Charity team

Designated charity team
Yes
Team size
10
Years of experience
173
Location
London
Remote working
Yes. No system limiatations.

9

Charity investment is far from a new concept and is a mainstream sector for many investment managers, HSBC has been looking after charity investments for decades. At the end of June 2024, HSBC Private Banking was responsible for the management of multi-asset discretionary portfolios totalling c. £466mn for charity clients. The team provide ongoing support to our clients to ensure they have the specialist advice they require. We are well versed in the complexities around managing ongoing investment portfolio requirements and administration of charities. Many of our charity clients are operational and run almost as commercial entities. We have many clients who are first-time investors and are equipped to help train Trustees and Boards on the various aspects of investment.

Ethics & ESG

Offers ethical investing
Yes
ESG-aligned funds
100

We can apply a wide range of exclusions to the direct equity allocation within our portfolios. We will additionally screen out certain sectors based on GICS sector definitions as standard (Gambling, Alcohol, Armaments and Adult Entertainment). When applying investment restrictions, we use information from a range of sources, including HSBC Asset Management ESG databases; third party data providers (such as Sustainalytics and MSCI) and GICS sector classifications. Final assessment is made by HSBC analysts. These restrictions are hard coded into our trading platform. Funds All funds and ETFs in our portfolios have to follow at least one of the following methods Negative screens, positive screens, Sustainable themes, Norms based screening, Impact investing, ESG integration, Active stewardship and voting. Within this, we seek funds with a focus on positive screening, norms based screening, sustainable themes and impact investing, where available and suitable. We consider ESG integration and stewardship/voting to be minimum standards which should be applied to all investment funds.

Fees

See submission for full outline of charging structure

Operations & service

Administration
Administration is local, within HSBC Private Bank UK. We have dedicated charity administrators.
Onboarding
2-3 weeks
Ongoing advice
With regards to our discretionary portfolio management service, decisions are made on a discretionary basis. However, in addition to our discretionary portfolio management service, our institutional platform which means we can advise on a range of asset classes to fulfil specific and complex investment requirements, or trade on your behalf, giving the Charity access to a wide range of asset classes, including single stocks, bonds, FX, structured investments, hedge funds, private equity and real estate. This would be held separately to your discretionary portfolio and advice would be given by Russell Hooper, Investment Counsellor, however we would ensure that the overall risk profile of your investments with HSBC remain within your desired risk tolerance.

Custody

In Private Banking UK, client assets are held in segregated client accounts and in all cases are kept separately from HSBC’s proprietary assets and those of its affiliates. HSBC has strict controls concerning the segregation of client assets. A custody fee is charged based on the assets under management held.

Get in touch with HSBC

Send a direct enquiry to HSBC. We pass it on through Charity Intelligence so we can follow up and make sure you got a useful response.

Your enquiry and contact details will be shared with HSBC.