Retail investors may be able to access PE investment products
Retail investors may be able to access private equity (PE) investment products in the near future, market sources say.
A new bond-like instrument may be in the works, with reports about it appearing last year in www.dealstreetasia.com and Private Equity International. The structure was pioneered by Temasek Holdings subsidiary Azalea Investment Management in 2016.
The instrument was popular but it was open only to sophisticated investors.
Now, a product for the retail segment from Azalea could be on the cards, giving the man in the street a chance to access what has turned out to be a very popular class of investments.
Interest in PE has surged in recent years, as investors sought returns above traditional markets.
Investment data service Preqin reported that PE assets hit a record US$2.38 trillion ($3.13 trillion) at the end of last year, an increase of US$248 billion from 2016.
But Preqin said that investors and fund managers are concerned about the impact of the capital influx on deal making, the exit environment and future returns.
PE, an asset class investing in private companies, is typically the preserve of institutions, family offices and ultra wealthy individuals. This is because PE funds are illiquid, with long holding periods that may range between eight and 10 years.
When contacted, Azalea chairman Teh Kok Peng declined to comment on market speculation.
But Dr Teh, a veteran of both the Monetary Authority of Singapore and GIC, noted: "Most of the middle class in Singapore or globally have savings but the savings tend to go into bank deposits or simple instruments where the returns are not very high.
"If you can create a vehicle available to retail through a structure that makes it less risky, that would be a good thing."
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