HSBC Investment Management has linked up with global asset manager Partners Group to launch the HSBC Partners Group Global Private Equity Fund. Aimed at private clients and smaller institutions, the Fund offers access to partnerships and funds in the private equity market while diversifying the risk.
Private equity investments offer high potential returns, but these are commonly associated with high risk on individual investments. The new fund will control the risk by being fully diversified, both geographically and across sectors. It will also offer investors early access to the market and reduce the “cash drag” effect – the performance reduction from holding cash reserves in the portfolio.
Andrew Withey, Senior Director, HSBC Investment Management, said: “The two barriers to the private equity market are the stock-specific risk and a lack of liquidity. We have been looking for the best way to overcome these to provide our clients with access to the market’s high potential and we are delighted to be able to offer a solution with this fund in association with the highly respected Partners Group.”
The fund offers ready access through monthly dealing for subscriptions and quarterly for redemptions. In the first two years redemptions cannot exceed inflows. There is also a low minimum investment, of US$25,000 and above. The fund is open-ended and set up as a SICAV based in Luxembourg. Under UK regulation it is categorised as an unregulated collective scheme. Distributor status will be sought for the shares, meaning that returns for UK investors will be subject to income and capital gains tax in the normal way. The Board, which will comprise HSBC Investment Management directors and an independent director, will take responsibility for setting the overall strategy of the fund, while Partners Group will act as advisor.
Partners Group is a global alternative asset manager with headquarters in Switzerland. It specialises in providing innovative, customised options for the private equity market to an international clientle. Erik Kaas, CEO of Partners Group (UK) Ltd, says “Combining our Private Equity experience with the experience, global reach and integrity of HSBC creates a unique proposition for investors, who can gain comfort from two of the biggest names in the business”.