Ibercaja is finalizing the design of its alternative asset vehiclewhich it hopes to be able to definitively market starting in the second half of next year among its private banking clients. And it will join the few entities that, at the moment, are distributing this type of products for an amount of less than 100,000 euros, as the regulations have allowed for two years.
The legislative change included the possibility of marketing unlisted asset funds (private capital and debt, infrastructure and real estate) for an amount less than 100,000 euros, which until then marked the limit of access to this type of funds, aimed mainly at high-income assets, in which a higher management fee is charged in exchange for double-digit returns and assuming a period of illiquidity that can last between five and seven years at least.
In fact, The regulations allow you to invest from 10,000 eurosprovided that this amount does not represent more than 10% of the client’s financial assets, which should not exceed half a million euros in this case, and is carried out through personalized advice.
A possibility that Ibercaja does not rule out. “Our teams will advise clients with reasonable proportionality criterion regarding the client’s availability of savings and investment and their investment profile,” points out Luis Miguel Carrasco, director of asset management and insurance at the entity, who explains that, in the case of a private banking client who, for example, , have a million euros to invest, “yes, you could be offered this product if your profile is bold [de mayor riesgo, en la escala de la firma] and always with that reasonable proportionality”.
Carrasco points out that, for clients with a lower asset volume who could access with a ticket of less than 100,000 euros, investing in the alternative asset fund would be the “icing on the cake” to add additional profitability without losing its conservative profile. “We are not going to tell anyone to put 50% of their assets in this vehicle,” he emphasizes. The product will have the format of background of fundswhich the manager itself will be in charge of selecting to make up the portfolio.
“We are going to choose alternative investments so that they add value to our fund, as they are the best and safest projects, taking into account that, when an alternative vehicle pays a 12% return and has no liquidity in ten years, The investor should not have a surprise in the tenth year“says Carrasco, who throughout his professional career has been president of a venture capital company and has served as an auditor for private equity firms.
The launch of this alternative fund of funds will take place in a year where the entity wants boost discretionary portfolio management among the clients with the longest experience in investing in funds, while it has integrated the private banking investment team with that of the manager to achieve greater synergies.
Business on the rise
And the high net worth segment is one of the businesses that all entities are promoting to gain market share in asset management, as well as independent advice, at a time when Brussels is favoring the distribution of financial products that justify their cost and profitability.
In this sense, alternative products, also known as unlisted or illiquid, have become one of the legs of the firms’ new strategy, by allowing higher management fees to be applied and investor loyalty for longer.
Bankinter was the first financial institution to announce that it would allow access to its alternative funds fund from 10,000 euros, while BBVA has set the access barrier at 50,000 euros for this type of product.
At the European level, managers are promoting eltif, which allows investment for amounts less than 100,000 euros, although it is then the distributor who can set an entry limit, which can be at least 30,000 euros.
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