Private markets advisory firm Reach Capital has launched a new division to help alternative asset managers target wealth clients.
The placement agent has hired Paul-Edouard Falck as director of private wealth solutions. He will join the team in Paris. Previously he was head of partnerships at Peqan, which provides private markets access to wealth managers and advisers. Over his 10 years’ experience in structuring investment vehicles, Falk helped raise more than €1bn in capital from non-professional investors.
The launch of a private wealth solutions business comes at a time when many alternative asset managers are working on products to increase access to the private markets. Reach Capital is aiming to help general partners (GPs) by structuring funds for private wealth investors, creating specialised marketing materials and fundraising in the French private wealth market.
Co-founder and managing partner William Barrett said Reach is aiming to build an international footprint in this ‘opportunistic market’ and provide a ‘holistic service’.
There has been increased interest in private markets from wealth managers and private bankers, but finding the right funds to invest in has been a struggle. Asset managers are increasingly structuring dedicated funds for the wealth segment, a recent Citywire study discovered.
A survey of more than 100 French wealth managers, conducted by Reach Capital, found that 70% of respondents are aiming to raise €1m or more from their clients in 2024, while 10% are targeting €10m or more.
The study also found that private wealth investors are prioritising private debt, secondaries, infrastructure and middle-market-focused buyout strategies for their investment programmes.
The majority of respondents, some 75%, believe non-listed fund offerings in the French life insurance market have not been sufficiently developed.
‘Democratisation in private markets is becoming an increasingly popular topic, but there are still gaps in this market,’ Falck said. ‘We are seeing a number of asset managers who are keen to get into private wealth but who stop at the creation of structured investment vehicles.
‘To seize this opportunity fully, one needs a perfect knowledge of the players in the private wealth investment ecosystem, as well as finely crafted marketing materials to successfully fundraise. Our mission is to help GPs build their own private wealth departments so they can become leaders in this up-and-coming market.’
Liquidity was cited as the main weakness of non-listed funds in the study, with more than 76.6% of respondents highlighting it as a concern. Despite this, only 10.4% of respondents take liquidity into consideration as a key element when selecting funds. The most important factors affecting investment decisions are strategy, team and track record.
When it comes to investment preference, 43.4% want a fund that offers liquidity and an internal rate of return (IRR) projection between 7% and 10 %, while 56.6% would prefer to have more than 10% of IRR and no liquidity.
For over half of the respondents the ideal minimum investment ticket is less than €100,000.
More than 65% of those surveyed said they would prefer to work with fund managers that have created dedicated strategies for private wealth clients over marketplaces.
