Standard Chartered Bank, the London-based, Asia-focussed giant, has unveiled a new scheme aimed at enabling the high-net-worth clients of its private banking arm to access private equity investments.
The bank’s so-called Pegasus Series programme is expected to appeal to many wealthy investors who are frustrated by the lack of access retail investors normally have to private equity, which is known for having high minimum investment requirements.
A bank spokesperson said the programme is only open to the bank’s private banking clients, not to intermediaries.
Anna Marrs, chief executive of Commercial & Private Banking for Standard Chartered, said the programme was being launched in response to “growing interest among our clients – particularly family offices across Asia – in private equity” over the last two to three years, as it has become “increasingly challenging to earn a decent yield from the public markets in today’s low-interest rates environment”.
In a statement announcing the launch of the Pegasus Series, Standard Chartered added that “with rising volatility in the investment landscape, high net worth investors who are able to take a long-term view are looking to private equity as an alternative asset class to diversify their portfolio for higher returns”.
According to the statement, the programme also would offer investors the opportunity to gain exposure to industries and asset classes that they would otherwise likely find difficult to access as individual investors.
“Not only are we able to provide this access at a substantially lower investment point, [but] our clients can also leverage our partnerships with best-in-class managers to capitalise on opportunities that typically require a complex knowledge of the market,” Stanley Sia, Head of Private Equity & Real Estate at Standard Chartered’s Group Wealth Management operation.
Length of commitment
As is the case for institutional investors in private equity, Pegasus Series investors understand that their money may be inaccessible by them for many years, as the private equity fund they have invested in is seen to completion – what the industry calls the “exit”, which normally sees the fund sell its investment to a trade buyer or else launched onto a stock market via an initial public offering. The exact length of time can be difficult to predict, and varies between funds.
Standard Chartered executives say this is why the investment is being “precisely targeted at HNW clients who can take a long-term view in their investment portfolio”.
“Having said that, we’ve tailored the Pegasus Series to our clients’ feedback, based on what they are looking for in private equity investments – so we’re looking at a shortened duration of investments, as well as other considerations like yield while they wait, access to opportunistic investments arising from current market volatility, and a world-class brand name,” a Standard Chartered spokesperson said.
Although its parent is based in London, Standard Chartered Private Bank is headquartered in Singapore, and operates out of 11 offices – including two trust offices – across Asia, Africa, Middle East and Europe. It was launched in May 2007, and acquired American Express Bank Ltd. in 2008.
Standard Chartered Plc is listed on the London and Hong Kong stock exchanges as well as the Bombay and National stock exchanges in India.