Family-owned Hong Kong brokerage Victory Securities builds on a long-established philosophy of client service and dependability.
Survival and prosperity for financial institutions over the decades in tumultuous global financial markets is so precarious that many partnerships, family-owned organisations and corporations have disappeared into the abyss of financial crisis and historical change. Lehman Brothers and Bear Stearns are just a few well-known Wall Street names that no longer exist.
Hong Kong’s capital markets have evolved into the financial hub and centre of capitalism for China. Yet few local family brokers are able to grow large and fast enough to keep up with – and serve the requirements of – the rapidly expanding Chinese economy, and investors who demand increasingly sophisticated services and products.
Victory Securities represents a rare breed of financial brokerage houses, one that’s independently owned and has been operated by the same family for the last 50 years. Today, its management reins are being passed to third-generation family member, Kennix Chan, deputy chief operating officer, who faces market challenges armed with his family’s enduring philosophy.
“My grandfather, Dr Kou Tak Tai, was the founder who established Victory Securities 50 years ago. Its original business was providing securities brokerage services to individuals and corporate clients in Hong Kong. Those were the days when a Hong Kong stockbroker was a bunch of people seated around tables sharing a bank of phones. Trading technology took the form of a chalkboard, where updated stock quotes were scratched in from the old stock exchange,” says Chan.
But instead of being fixated on short-term trading and broking, his grandfather sought to build something more enduring.
“My grandfather believed faith and trust should infuse the entire way the firm conducted business with clients and employees. He regularly said and practised his abiding belief that ‘the clients’ interests always come first.’”
His guiding principles still preside in the form of Chinese calligraphy in the company’s boardroom. Chan distils his grandfather’s vision that continues to inspire Victory today.
“We aim to be a trusted, lifelong partner to our customers and stakeholders in delivering on our core competencies: outstanding service, innovative solutions and wealth creation.”
Such insight and vision were unusual in those early days, but China’s subsequent rise as the world’s second-largest economy and an important financial market has compelled Hong Kong’s stockbrokers to meet global standards or exit the industry. A commitment to flourish in the new environment and sharp market cycles demand an uncommon vision and determined, consistent execution.
Chan says, “Today, we translate those principles into rigorous risk management, downside protection, and capital preservation in our operational decisions, and in the advice we give our clients.”
Survival and prosperity in investment and financial markets is no simple matter of rejecting all risk and avoiding any unconventional opportunity. “We’ve always decisively seized opportunities during market crisis.”
Victory bought its office building during the uncertain atmosphere of the global financial crisis. Aside from establishing a permanent office that offsets rental expenses in a city that was notorious for sharp rent increases, it effectively preserved cash flow. The latter was invested in margin financing and business development, which helped expand the company’s business in the subsequent rising market.
And in 2015, the company thought a financial bubble was peaking, so it decisively reversed its credit position and lowered its margin ratios for clients. Risk-taking and risk management are two sides of the same coin. Yet they can either represent an insurmountable challenge or a once-in-a-lifetime opportunity depending on the viewpoint.
Victory’s corporate culture draws from its decades of experience and market research and analysis to provide a comprehensive range of innovative financial products and bespoke asset management and financing solutions for multinational companies, institutional and individual investors alike.
Victory offers a comprehensive range of securities brokerage services, and asset and wealth management solutions in traditional and alternative asset classes, debt and equity capital markets, and structured financing and investment advice. “We welcome all types and sizes of clients and accounts. Our team focuses on each client’s long-term objectives and their risk and return requirements at different life stages.”
Victory strongly believes in the future of China’s capital markets and is investing heavily in establishing an asset management division in Guangzhou. They continue to expand other segments of their business, such as the wealth management arm, by setting up private funds, trusts and insurance for professional and individual investors.
The company also launched an award-winning app in 2018 for online multi-platform trading. It enables clients to access exchanges across China, Australia, Canada, Europe, Japan, Singapore, the United Kingdom and the United States.
As Chan also proudly points out, “We’ve retained the loyalty of some multigenerational clients whose relatives started with us from our early days. It’s because we listen and take care of them without pushing products. Our competitive advantage comes from an emphasis on flexible decision-making through a lean management hierarchy.”
A family-owned business, Victory considers all employees to be part of that family. Chan describes the importance of cultivating transparent management policies. “Instilling confidence in employees is accomplished through open-minded and inclusive practices. For example, we cover benefits such as employee education and healthcare. We allow for open debate and discussion at all levels. And besides donating to charities, we invest in regular team-building events and off-site training.”
Chan leads his corporate culture with a style that is collegial and consultative. Victory’s business culture values decisive decision-making when boldness and conviction are called for – important traits in a volatile and uncertain environment.
He elaborates his vision on how a financial-services organisation prospers on seamlessly generating and sharing ideas among colleagues and clients, and across cultures.
“Tremendous opportunities lie in providing financial services to the Greater Bay Area, as Hong Kong and the GBA further integrate as a single financial market. Public policies and the rapid growth of China’s middle class are creating a demand for more efficient platforms for mainlanders to invest in a wider range of onshore financial products and access Hong Kong’s offshore financial services.”
Victory is preparing for rapid regional and international growth with representative offices in Beijing, Tianjin, Suzhou, as well as branches in Shenzhen, Singapore, and Japan.
Today, Victory employs around 70 people. Its financial background is sound, with the asset-management and brokerage business still a core revenue generator, especially after its IPO in 2018. While serving its base of institutional and retail clients, it seeks to diversify its business in four major sectors: brokerage, asset management and capital-market and wealth management around the globe.
“We’re well-positioned in China, as our asset-management arm was awarded Qualified Foreign Institution Investor (QFII) status by the China Securities Regulatory Commission (CSRC),” says Chan. “Bond, Stock and Wealth Management Connect programmes between China and Hong Kong are positive developments for future trends in our industry. Bond Connect is especially compelling, as more fixed-income products will come to market. Refining financial connectivity between Hong Kong and China will internationalise finance.”
In Singapore, the company has formed Victory Nest Asset Management Pte Ltd, a venture-capital fund-management firm, which will help it expand its asset management business network to overseas countries. Victory Nest has also applied for a registered fund-management company licence to widen its capabilities.
Cryptocurrencies and virtual-asset products have proven to be both controversial and attractive. Their rise as alternative asset classes can’t be ignored as they disrupt mainstream finance, and high-net-worth individuals and institutions play a role. Chan says he’s closely monitoring its evolution to strategise the group’s future involvement in this new asset class.
Victory Securities is inspired and guided by its past beliefs and distinct culture to confidently move into an uncertain yet exciting future in financial markets.