UBS joins forces with private equity firm Partners Group to give wealthy clients access to private markets
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- Swiss bank UBS and private equity group Partners Group said they would team up to offer wealthy clients access to private markets.
- Private markets offer access to companies that do not yet trade publicly, as well as real-estate and infrastructure projects and vehicles such as buyouts. In the past, only the very rich have really had access to them.
- "This collaboration will broaden our clients' access to private markets and deepen its place within their portfolios," Sergio Ermotti, UBS group chief executive said.
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Swiss investment bank UBS said on Friday it had joined forces with global private equity firm Partners Group to offer its wealthiest clients access to private markets, an asset class that tends to yield handsome returns, but only for those that can afford to invest.
Private markets, where investors can tap into private-equity buyouts, or buy coveted stocks before they even come close to seeking an initial public offering, have in the past only really been open to the very richest customers. They were also long considered too hard to access, too illiquid, or too opaque for more traditional investors.
The deal will give wealth management clients in Switzerland and other selected markets across Europe and Asia exposure to Partners Group's direct private equity investments, which will be pre-selected by UBS, the two companies said in a statement.
With interest rates in most developed economies at, or near zero, and high equity valuations, it is becoming tougher for asset managers to deliver much in the way of yield to their clients. Private markets are smaller and more volatile, but this sector is growing quickly.
Consultant McKinsey said in its 2019 review of the private-markets space, that in this century, it had grown by 7.5 times, twice as fast as public market capitalization.
UBS is the world's largest asset manager, but it isn't the first to offer clients a cheaper way to access private markets.
BlackRock, UK fund manager Aberdeen Standard Investments and even newer outfits have begun to offer access to a wider range of clients.
Online investment platform Truffle Invest says traditionally, only institutional investors who can invest in excess of €10 million ($11.49 million) per fund have had access to the private markets and individuals have not been able to participate. The company now offers access to private markets funds for just €5,000 ($5,780).
UBS and Partners Group's new product would target an annual investment capacity of $1-3 billion over time, they said.
"This program will offer UBS wealth clients private markets capabilities on a par with those Partners Group offers to institutional investors, including some of the world's leading sovereign wealth funds," Urs Wietlisbach, co-founder of Partners Group, said.