HNWs offered solo route into PE

UK wealth management group SG Hambro has again teamed up with UK private equity house Duke Street to launch a private equity fund for its individual investor clients

As further evidence that the spectrum of investors in Europe interested in private equity as an asset class is getting wider, SG Hambro has announced that it is launching its Private Equity Fund V.

Whilst some wealth management firms, such as Schroder & Co, have opted to deliver private equity investment opportunities to its clients via a packaging of several private equity funds [the Fund of Funds], SG Hambro is putting all its eggs in one basket and will be investing exclusively in Duke Street Capital’s own Duke Street Capital Fund V.

This is the fourth such partnership between the two firms, where SG Hambro’s access to high net worth [HNW] individual investors is matched with Duke Street’s pan-European private equity investments.

SG Hambro’s last partnership with Duke Street saw it raise E11m from its clients and the company said that it was aiming to raise a similar amount for Fund V. The firm is looking to deliver a net return of around 30 per cent to its investors in Private Equity Fund V and the minimum investment per client is E40,000. The target closing for the fund is before September.

Duke Street Capital Fund V will be investing principally in mid-market management buyouts, buy-ins and acquisitions across Europe. The mid-market is proving an increasingly significant proving ground for private equity funds as it remains a relatively uncrowded space given the breadth and depth of opportunity across the region.

Several key European private equity firms, Duke Street included, have recently indicated that the appeal of investing in mega-deals was waning as US competition and an increasingly tight risk/reward ratio made them less attractive propositions. The firm’s Fund V will be looking to exceed easily exceed the 30 per cent net return target by focusing on these smaller but potentially much better yielding investments.