59 Private party


Appetite for PE continues to grow. And for good reason, says Charlie Hoffman


DELOITTE ESTIMATES that global private equity assets are set to grow to $5.8 trillion by 2025. At HSBC Private Banking, we have seen an increasing appetite from our clients for private equity. Client participation, measured by the number of client subscriptions into private equity funds, has grown more than fivefold in the last 20 years. Private equity is not a new phenomenon, Yale and


Harvard endowments have had large allocations for decades. But interest is certainly growing now, partly because of the realisation that by staying private for longer, companies can grow far larger and for far longer without having to worry about short-term returns for shareholders. Investors have become wise to the fact that without accessing private markets, they are missing out on a large part of the fastest growing companies in the world. According to McKinsey, by most measures, private equity has outperformed its public market equivalents over the last decade. This is not about investing in corporate raiders who load companies with debt and run off with the spoils. Private markets have moved from the fringes to the mainstream; reputation and good governance are key. However, there is a huge disparity of returns for investors.


It’s therefore important to partner with a firm which has access to the best managers, consistently ranking in the top quartile. HSBC Alternatives allocated $4.3 billion to private equity last year, making it one of the largest allocators to the asset class globally. Through our partnership with HSBC Alternatives, private banking clients have access to an institutional-quality private equity offering that is typically unattainable for private clients. Clients can invest in several ways. First, they can invest alongside HSBC’s institutional client programme each year, giving them the same access to co-invest and secondary deals as institutional investors. Secondly, they can invest in secondary transactions, where they buy a fund or transaction that has already begun its investment journey. Thirdly, they can invest on a fund-by-fund basis. Finally, large family offices have the ability to build a bespoke programme with the best of all options, but may have a particular focus on geography, theme or sector. The returns speak for themselves. HSBC Alternatives


achieved a net IRR of 24.4 per cent for primary investments, 22.7 per cent on secondaries, and 21.8 per cent on co- investments as at Q1 2021 since 2012. Overall HSBC Alternatives returns are eight per cent above the broader private equity market (as measured by MSCI ACWI PME). Private equity is here to stay.


Charlie Hoffman is a managing director at HSBC Private Banking


Bandish Gudka LGT Vestra


FOCUS Tier 1 investors


Quentin Marshall Weatherbys Private Bank


FOCUS Private banking


Bandish Gudka joined LGT Vestra (then Vestra Wealth) eight years ago, and reveals that 99 per cent of the firm’s recent expansion comes from referrals. ‘If one is able to deliver results when a storm is hitting the shore, their trust in you really showcases itself. So much so that they have the confidence in you to say, “Look, we trust you to take that next step further”. Championing you to their network is a massive endorsement,’ he says. The manager adds value as a trusted adviser, alongside his duties as investment manager and firm partner. ‘I see it as an extension,’ he says. ‘I take the time to develop what I hope will be a deep relationship with clients.’ He also speaks seven languages.


‘The biggest brain in the industry,’ says an insider of Quentin Marshall, and in 2018 the Spear’s judging panel agreed, naming him our UK Private Banker of the Year. Marshall stepped up to head


Weatherbys Private Bank in July 2017, having joined in June 2015 as deputy head. Previously, he’d been at Coutts, as head of advisory within the investments team and deputy chairman of the investment strategy committee.


‘Old-fashioned values such as


integrity, courtesy and respect are my watchwords,’ Marshall says. ‘I believe in treating clients as individuals and as part of the extended family.’ He tells us that he tries to foster


a culture that encourages staff to be individual.


Josh Matthews MASECO Private Wealth


FOCUS American expats


I believe in


treating clients as individuals and as part of the


extended family


Bandish Gudka LGT Vestra


The former Citi director co-founded MASECO in 2008 to offer wealth management services to affluent US families living in the UK, the US and elsewhere with cross-border financial needs. The firm also provides investment management and financial planning services to Americans resident in the US who seek a more global perspective. ‘Working with Americans is complex, because they’re taxed globally by the US irrespective of residency,’ he says. ‘We’re very well set up to invest wealth in a rational and tax-efficient manner tailored for Americans in the UK.’ Dubbed a ‘creative thinker’ by


peers, Matthews spearheaded the drive to make MASECO the UK’s first Benefit Corporation in financial services, which he achieved in 2013.


HNW WEALTH MANAGERS


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