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.
“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,” said Andrew Withey, senior director, HSBC Investment Management.
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.
HSBC Partners Global 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.
The fund is open-ended and set up as an SICAV based in Luxembourg. Under UK regulations 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 adviser.
“Combining our private equity experience with the experience and global reach of HSBC creates a unique proposition for investors,” said Erik Kaas, CEO of Partners Group, an alternative asset manager with headquarters in Switzerland.