SYZ leans towards distressed targets with new private markets unit

The Swiss banking group will seek up to €200m for a vehicle targeting primary fund commitments, directs and secondaries opportunities across private equity, debt and real estate.

SYZ Group, a Swiss banking group, has worked up an appetite for distressed and special situations with its new private markets investment unit, SYZ Capital.

The Zurich-headquartered firm has set a €200 million hard-cap for its debut fund, which it aims to close at the end of 2019, managing partner Marc Syz told Private Equity International. Up to 50 percent of the capital will be committed to private equity, private debt and real estate funds, with the remainder being split across primary investments and secondaries opportunities.

SYZ Capital will also target direct buy-and-build investments in Europe and developed Asia on a deal-by-deal basis. The firm has five staff on its dedicated investment team and is looking to make further hires.

“Right now in the cycle we would look at more special situation-type experts or distressed-type situations, as we get prepared to see more and more opportunities in the segment,” Syz said.

“[We’ll] probably do less equity, and on the equity portion look more for fairly-valued companies or managers looking for value plays or growth-type situations, where they’re buying at lower multiples.”

Marc Syz previously served as managing director at Swiss fund of funds Ace & Company, where he led the firm’s Asian expansion, and as head of capital markets & equity sales at Union Bancaire Privée in Geneva. He is joined by co-founder Olivier Maurice, also an Ace & Company alumnus.

SYZ has provided seed capital for its fund and will look to raise from the group’s existing private banking client base and existing investors, Syz said. The fund will charge a 1 percent management fee and 10 percent carry with an 8 percent hurdle.

“We’re trying also to get reduced fees into funds thanks to our network or simply because of the size we’re representing in some of the smaller funds,” he added.

“We’ll give back those fees reductions to investors so it’s fully transparent. We’re not really living off the management fees and that’s not really our intention – it’s more to charge a performance fee which we believe is fair so we can try to keep total expense ratios very low.”

In September, Banque Internationale à Luxembourg, a retail, private and corporate banking group, launched a private equity fund of funds as part of a newly formed unit dedicated to the asset class. The group, which has €39.4 billion of assets under management, created the BIL Private Invest fund “to serve the needs of our ultra-high-net-worth investor clients who are looking to invest in PE funds as part of their investment portfolios”, a spokesman told PEI.

Founded in 1996, SYZ Group has CHf37.2 billion ($37.7 billion; €33.1 billion) of assets under management across 14 offices.