This necessitates private banks to be enormously flexible, but also requires them to have a high level of expertise and access to the venture networks – high barriers for niche wealth managers.
Popular Property Investments
Three Swiss banks – Banque Pâris Bertrand Sturdza, Bordier and Reyl – pooled their private market investments three years ago in investment boutique Hermance Capital. Co-founder Jacques Chillemi told finews.asia: «As a wealthy client, I would be very careful with club deals offered by private banks.»
Most firms simply lacked the necessary expertise and investment opportunities often ended up at those banks because nobody else had shown an interest, said the expert.
Simple Due Diligence
Corestate Capital Group counts on investor Rainer-Marc Frey as one of its customers. The company itself takes a ten-percent stake in the deal, private investors participate with at least 1 million euros ($1.14 million) and the average return is 26 percent.
The investments on average last a little longer than three years, a comparatively low figure compared with other private market assets. The fairly simple due diligence procedure and development opportunities also speak in favor of real estate club deals.
Customers Expect a Return
The successful business established by firms such as Corestate are a reason why private banks increasingly show an appetite in entering the market. But pressure is also coming from the client side.
Rich private banking clients typically are active as entrepreneurs and as such, they love to invest in such as spirit instead of simply buying products provided by the banks. And that's also a reason for why they chose such specialists.
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