Ex-Deutsche Bank alternatives head seeks to ‘turbocharge’ retail push

London-headquartered alts platform S64 expects its AUM in 2023 to reach at least $5bn, as it expands across financial hubs in EMEA, Asia and Australia.

S64, an alternatives technology platform founded by the former global head of alternatives and multi-asset solutions at Deutsche Bank, is seeking to more than double its team as the onslaught of retail capital enters the private markets.

The London-headquartered firm plans to have around 100 staff over the next 12 months, Tarun Nagpal told Private Equity International. He expects the firm, which launched in 2020 and had been operating in “stealth mode”, to manage assets of more than $5 billion by next year.

S64 has won mandates from a majority of the 10 largest private markets managers globally as well as private banks and ultra-high-net worth investors in Europe, the US, Asia-Pacific and the Middle East. Its product offerings include the structuring, delivery and servicing of European Long-Term Investment Funds, UK Long-Term Asset Funds, and open-ended semi-liquid retail products.

Tarun Nagpal. S64
Nagpal: Expects Japan to become a meaningful retail market

“It feels like the tip of the iceberg is now clear for all to see and the market has almost a fear of missing out on both sides,” Nagpal said. “The GPs feel that if they are not out there with retail-focused products today, it will be difficult for them to come to market.

“On the wealth market side, their concern is that if they don’t provide this suite of products, they will start to lose clients to those banks that do.”

Liquidity provisions are offered via the secondaries market, fund financing and FX hedging, Nagpal said. S64’s platform offers secondary market facilities, generally offered on a quarterly basis. The firm is also creating a panel of secondaries participants and banks to trade on the platform.

“Where we see ourselves is being the ultimate player in bringing all that together to create a real multi-faceted, secondary liquidity market, bringing many balance sheets to the table and harnessing our expertise, technology and relationships,” said Nagpal.

The firm’s latest appointments include Deutsche Bank veterans Venkata Kota, who is head of client solutions; Richard Marland, who was hired as head of operations and fund governance; Tetyana Turek, who will work on business and project management; and Eve Wachtel, who will lead Southeast Asia coverage. Mark Slater, who was previously with JPMorgan and Simmons & Simmons, will serve as legal counsel for the firm.

Nagpal said the business has also seen exciting growth in Australia.

“We want to turbocharge that growth and have a considerable international pipeline of work. We also expect Japan to become a meaningful retail market.”

He added: “The market is moving at a rate we have not seen before… Private banks are also now looking to escalate their businesses. It’s not just niche UHNW investors. They are expanding their franchise across retail products and discretionary mandates. Our clients are significantly expanding the suite of what they are trying to do in this space, and we want to be best positioned to serve that need.”

S64 joins a number of seasoned private markets professionals that have set up platforms and offerings focused on the retail channel. Steffen Pauls, former managing director of KKR, founded Europe-headquartered fundraising platform Moonfare in 2016 and has since expanded the business to Asia and the Middle East with over €1.7 billion of AUM.

Newly launched Private Markets Alpha, meanwhile, was set up by Tom Douie, who was previously global head of distribution at Muzinich & Co and prior to that MD at Neuberger Berman.

Blackstone, Ares Management and Apollo Global Management are among firms bulking up their alternative offering to the masses, with the latter indicating up to 30 percent of fresh capital would come from the wealth channel over time.

Read more on how private equity is coming downstream here.