Schroder Investment Management Australia’s Specialist Private Equity Fund has been upgraded to ‘recommended’ by wealth advisory research firm Lonsec. The fund was also recently added to the AMP MyNorth wrap platform used by wealth advisers.
MyNorth is the eighth wealth advisory platform to include the Schroder fund and reflects increasing demand from private investors and their advisers for access to private equity investment.
Schroders Australia alternatives director, Claire Smith, said the fund had been designed to provide access to individual investors that had not previously invested in private equity. The fund was structured with a lower minimum investment than many competitors, a semi-liquid structure and competitive fees.
“It’s been hard for many smaller investors to access the private equity market, leaving it in the realm of big institutions, but we are seeing more demand and we’ve designed the fund with this in mind,” Ms Smith said.
“The fund focuses on small to mid-cap specialist opportunities across the US and Europe, as well as Asian growth companies. This segment has historically outperformed the wider private equity market and sets the fund apart from others available to Australian individual investors.
“Investors are chasing growth in the current low interest rate environment. This has pushed up stock prices in exchanges across the world, yet many of these market valuations remain high and there is still a fair amount of volatility around.
“Private equity funds offer access to a broader universe of companies than those listed on public exchanges, including many early-stage and growth-orientated companies. In fact, there are an increasing number of early-stage businesses that are looking for capital outside of the public markets.
“Even before the COVID-19 pandemic, many businesses were turning away from measures such as initial public offerings to raise capital for various projects. The Schroder Specialist Private Equity Fund is a facilitator in providing capital to these early-stage growth companies.
“The fund aims to generate an absolute internal rate of return of 10% to 12%, net of fees, over periods of five years and longer, which can be attractive for an investor with a long-term investment horizon,” Ms Smith said.
The fund also has a ‘recommended’ rating from superannuation research firm Zenith and is additionally available on BT Panorama, BT Wrap, Macquarie Wrap, uXchange, Xplore Wealth, Hub24, and Netwealth investment platforms.
The Schroder Specialist Private Equity Fund was launched in Australia in mid-2020. The fund is managed by Switzerland-based Schroder Adveq Management AG, a specialist manager of private equity funds and mandates that Schroder acquired in 2017.
The Australian fund is a feeder fund to Schroder Adveq’s open-ended GAIA II Specialist Private Equity Fund launched in 2019. The GAIA II fund’s mandate allows it to invest across private equity strategies, regions, sectors and industries. This means it can allocate to primary and secondary fund managers and make direct or co-investments. Strategically, the fund seeks to focus on small to mid-market buyouts – to make up around 60% of the fund – with additional allocations to turnaround, and to venture/growth capital.
Image: Schroders Australia alternatives director, Claire Smith.