By Douwe Miedema
LONDON (Reuters) - Affluent investors may soon gain access to profitable private equity funds, a senior financier said, as banks are setting up funds opening up the industry once reserved for the world's ultra-rich.
Meanwhile the world's billionaires and millionaires continue to pour money into hedge funds and private equity groups, another industry participant said on Tuesday, keen to earn similar high returns on their capital as institutional investors.
The chief investment officer of private equity firm Apax Partners Worldwide LLP said private banks could provide further access to participate in his firm for wealthy clients who are not rich enough to be called millionaires.
"There is a move among some private banks to produce products that are syndicated groups of investments either in one private equity fund or across a number of private equity funds," Apax's Adrian Beecroft said at the Reuters Hedge Fund and Private Equity Summit.
"Most private equity funds have a minimum size of investment, so there is scope for a collective vehicle for people wanting to invest," he added, saying there was rising interest to take part in such funds.
His company was already backed by some ultra-rich people, most of whom Apax had invested in in the past and who were now recycling the money they had made back into the fund.
Private equity firms and hedge funds set high entry levels, making it hard for individual clients to access them. But banks were now grouping client money in alternative investment funds, providing the sector access to new capital.
Institutional investors now provide the largest share of funds in the alternative investment sector, an industry once set up by rich individuals, Nils Tuchschmid, head of Multi Manager Portfolios at Credit Suisse (CSGN.VX: Quote, Profile, Research, Stock Buzz). Continued...
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