Wealthy individuals in China are showing a greater appetite for risk and are increasingly turning to alternative investments, according to a study by McKinsey, the consultancy, of 800 high net worth individuals (HNWIs) across 19 Chinese cities.

About 71 per cent of the people McKinsey spoke to at the end of last year said they were looking for high-risk, high-return investments. Each of those individuals had at least $5 million (Dh18.36 million) in investable assets.

Investors also expressed interest in ‘innovative products’, which include structured, highly leveraged and lending products, says Kenny Lam, a partner at McKinsey and the head of its Asia private banking and wealth management practice.

About 83 per cent were found to invest offshore, with 40 to 50 per cent of their assets physically located outside China, according to Lam, citing business needs and product selection as the two significant reasons behind this.

 

“Chinese HNWIs’ needs for overseas asset allocation are on the rise in an era of capital globalisation,” reads the study. And Chinese banks, it says, “should leverage their deep understanding of and good relationships with Chinese HNWIs, and develop models that best suit their strategy to accelerate their overseas expansion.”

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