With 25 years of international investment banking experience across London, Tokyo, and Hong Kong, Michel Lee brings deep expertise in capital-raising and M&A transactions to the digital asset management business. Today we talk to him about his career journey that has taken him from 25 years at UBS to HashKey, where he is Executive President.
Q: Your talent for creating complex financial instruments is well recognized in the industry. What did you do to prepare?
A: I have a qualitative academic background with an MSc in Computer Science from Imperial College London. Prior to Hashkey, I was the head of APAC Capital markets and a board director at UBS securities. I worked across London, Japan and Hong Kong and focused on technically complex financial products. UBS was able to create new ways for client companies to raise capital. Now at HashKey, we are utilizing such learnings to explore new horizons in exchanges, liquidity solutions, custody, and investment opportunities.”
Q: You are a seasoned professional in the traditional financial industry. Why do you join a digital asset company? What do you like about the HashKey Group?
A: Digital assets are not a new area. They are a developing asset class with tremendous growth potential. Most people are familiar with cryptocurrencies such as Bitcoin and Ethereum, but there is so much more than that. There are also tokenized equities, tokenized bonds and digital economy tokens.
From our field experience, interviews and research, we know that institutional investors have strong interest in digital assets, but there are obstacles to overcome. With an improving regulatory environment and a developing market, I would like to leverage my experience in institutional investment to facilitate adoption of digital assets in institutional investors’ portfolio.
HashKey Group is a strong company with expertise, ecosystems and cutting edge fintech solutions. We have a professional and dynamic leadership team and innovative blockchain research, developers, and technologies from our sister company Wanxiang Blockchain. I am thrilled to be here at such an exciting time when digital assets are growing rapidly. I hope to lead the company through its next phase of growth.
Q: We see more and more senior executives from the traditional financial industry moving to the digital asset space. Why?
A: Digital asset is a developing asset class with tremendous growth potential, but it is still quite new compare to the traditional asset classes. It is good to see more experienced professional in the financial industry joining the digital assets space to facilitate its next phase of growth.
Q: What makes you so confident about the future of digital asset? Do you think it is better than the traditional financial tools?
A: Digital assets are distinct from traditional asset classes such as cash, equities, bonds, real estate or physical gold. It is just a different financial tool.
From our field experience, interviews and research, we know that institutional investors have strong interest in digital assets. Compared to the US$67.5 trillion investment as of 2020 in traditional asset class such as equities, US$34 trillion in physical money and US$7.5 trillion in gold, the total market capitalization of digital assets is just US$260 billion. It has significant growth potential.
Q: For institutional investors, what’s the role of digital assets in their overall portfolio? are they trying to get outsized returns, or diversifying?
A: A lot of it would depend on the type of institutions. The first movers tend to be family offices, because their goal is long term capital preservation and long term tracking to make sure they don’t miss out on the big upside. These are the investors with very long horizons and greater autonomy on their investment decisions. The second group tends to be the smaller hedge funds – more trading oriented and looking for market alphas. The liquidity around digital assets, as a trading instrument, volatility is always interesting. If you’re smart and you’re a fast mover, you can generate profits. That’s what’s potentially attractive to these smaller hedge funds.
The big, global hedge funds, who were historically hesitant because of the regulatory burden or the complexity are also now getting active in this space.
Q: Why is Hong Kong a significant region when it comes to digital assets?
A: From the regulations standpoint, Hong Kong is one of the most advanced financial centers and it is important, especially in New Frontier technology or financial technology like this. With a supportive regulatory framework, it is safe place to build and innovate in this space.