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Rock Strata

Private equity

At HSBC we have a particular approach to private equity investing. We focus on strategies in which we have the highest conviction, selecting what we consider to be the ‘best-in-class’ managers, who in our opinion should be able to reward you for the illiquidity associated with private equity.

HSBC’s private equity investment philosophy

Private equity investing should always deliver an illiquidity premium when compared against public equity market investing. Our investment-led process has been refined to focus on high-conviction private equity strategies with risk-return profiles that have rewarded illiquidity in the past, and where we believe that a supply and demand imbalance between the need for investment and available capital will persist in the future.

To deliver an illiquidity premium we are focused on what we believe to be best-in-class investments, giving you choice on how to access Private Equity and how involved you want to be in the investment decisions.

Key strengths in private equity investing

Private equity strategy selection

We focus on investing in strategies where there is a genuine need for private capital and which we believe can compensate for the illiquidity associated with private equity investing. We have the depth of knowledge and are also able to dedicate significant time into screening the manager universe in these four areas to ensure access to ‘best-in-class’ managers globally.

Manager sourcing and selection

 

Manager selection skills are so important in private equity, given the gulf in performance between the best and worst funds. Our team’s manager selection process is founded on a wealth of experience, strong industry knowledge and a comprehensive due diligence process. This process, combined with our sector expertise, facilitates the identification and selection of what we consider to be the best and most appropriate managers.

Exclusive investments

 

Our team’s expertise in their core areas of conviction often means we are able to gain access to exclusive, institutional-quality opportunities with leading private equity groups. We are then able to deliver these opportunities to our clients in a variety of ways according to their needs and desire for involvement.

HSBC’s private equity client solutions

 

We always focus on ensuring we deliver the most appropriate investment, in the most appropriate manner. We understand that different clients want different levels of involvement; therefore we offer a range of solutions from standalone funds to customised mandates, as well as access to proprietary secondary deals and direct co-investments for our family office and institutional clients.

  • Funds: exposure to what we believe to be the best-in-class managers in high-conviction strategies.
  • Discretionary Private equity portfolios, Club Deals and Co-investments: Innovative and exclusive opportunities to invest in private equity.
  • Segregated mandates: customised private equity solution with ongoing client involvement and knowledge transfer.

 

Investment Outlook Q4 2021: Slow(er) and steady wins the race Watch the video: Investment Outlook Q4 2021: Slow(er) and steady wins the race
Watch our Global Chief Investment Officer Willem Sels discuss our investment strategy for the mid-cycle stage. Equity, credit and EM bond returns should remain respectable, but within equities, we increasingly focus on quality, large caps and dividends.
Since we began working with the private equity industry decades ago, we’ve been honing our ability to find the best private equity managers.
  • Alternative investments may not be suitable for all clients
  • The value of investments can fall. It is important to note that the capital value of, and income from, any investment may go down as well as up and you may not get back the full amount invested
  • Limited marketability and transferability
  • Illiquidity (lockups of 12 or more years)
  • Complex tax considerations
  • Lack of regulatory oversight and protection
  • Delayed or limited valuation information
  • Past performance is not a reliable indicator of future performance
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