U.S. Bancorp is making buyout investing an early focus for a new business unit that will manage money for super-rich individuals and families with assets of $25 million or more.
Ascent Private Capital plans to employ a variety of strategies for investing in buyouts and other alternatives. It will act as point of contact with fund sponsors on behalf of individual clients, or for group of clients investing individually. It also may pool clients assets through “feeder funds,” a practice that is permitted under the Dodd-Frank financial reform law, Rauchle said. Dodd-Frank has put new restrictions on many of banks’ private equity investing activities.
The business unit announced two new appointments in July and August, and is likely to end up with a team of six investment professionals analyzing opportunities for investors, plus one or two client-facing pros in each of its offices, Rauchle said. Ascent Private Capital plans to open four additional offices in 2012.
U.S. Bank believes it is going beyond conventional wealth management services with the initiative—providing services such as security and liquidity, and advice on personal lifestyle—to give clients a greater opportunity to focus on social issues and community impact, Rauschle said.
Kurt Silberstein, who was appointed in July to be the managing director of alternative investments for Ascent Private Capital, said the unit’s target market would have a generational turnover of wealth of $30 trillion to $70 trillion in the next 20 to 40 years, making it a source of investments that could be competitive with defined benefit retirement plans, a major source of limited partner commitments for alternatives today.
“I believe this is the next growth area of institutional asset management,” Silberstein said.
Ascent Private Capital expects to make its first commitments in the first quarter of 2012, said Jonathan Firestein, who was appointed in August to be head of private capital for the new unit. Ascent Private Capital will be studying investments not only in LBO funds, but also venture capital, private debt, distress and turnarounds, real estate and other real assets. The unit also may pursue secondary purchases, both in the United States and abroad, Firestein said. “It’s not just about domestic buyouts. It’s about all the choices you have in the world.”