Article written by Glenda Korporaal. Published in The Australian November 24, 2023.
Wealthy investors in Australia are being offered the opportunity to invest alongside the royal family of Liechtenstein in a $US18bn fund available to clients of LGT Crestone.
Chief executive Michael Chisholm said the fund, known as Global Investable Markets (GIM), would give high net worth Australians access to asset classes such as private equity, private credit and real assets at a time when many investment opportunities were emerging in private markets.
Formed from the acquisition of UBS Wealth Management Australia, Crestone Wealth Management was bought last year by the private banking and asset management arm of the Princely Family of Liechtenstein, LGT International.
Mr Chisholm said the new opportunity gave investors the chance to invest alongside the royal family and the staff of LGT, who had more than $US3bn of their own money invested in a fund which has been in operation for the past 25 years.
“This is an opportunity for clients to invest alongside the royal family in exactly the same investments, and the same pricing that the royal family is getting, is quite a remarkable thing,” he said.
The fund is managed by LGT Capital which has a staff of 20 in Europe, Asia, and the US. Mr Chisholm said the fund would appeal to people looking for long-term investments with strong equity-like returns but less volatility.
“The fund aims to generate long-term returns similar to a listed global equity portfolio, but with lower volatility through broad diversification and exposure to private markets and alternative assets. Client are continually looking for investment products that can provide attractive returns without high correlation to global share markets.”
LGT Crestone’s clients, who have an average of around $10m in investable wealth, can access the fund for a minimum investment of $50,000. The fund will not pay any dividends, but investors can access their money at any time subject to total redemptions from the fund being limited to 5 per cent a quarter.
Mr Chisholm said the fund would give investors access to global investments and deals which were not easily accessible to individual investors.
“While the (fund) still invests in traditional asset classes, it has a relatively high exposure to private markets assets, including private equity, which have historically been a source of outperformance to public markets and are not otherwise easily accessible,” he said.
He said the investment in alternative assets was designed to cushion downturns in the portfolio for investors but still deliver long-term growth and income. “The owner-manager structure of private equity holdings, together with long investment horizons,allows for active value creation over a full cycle,” he said. “In private credit, contracts are individually negotiated inclose relationship with the counterparties.
“Carefully selected infrastructure and real estate deals also offer the potential for income yield and capital growth.”
LGT is an international private banking and asset management group owned by the Princely Family of Liechtenstein and has developed its strategy for future generations of the family.
Mr Chisholm said changes in financial markets now meant that investment opportunities were increasingly in private markets as opposed to traditional assets like shares, with many growth companies now choosing to remain private or delaying their stockmarket listing.
This made it difficult for smaller investors to access these opportunities, he said, and also made it difficult for traditional wealth managers who focused on advising clients on investing in public markets.
“More of our client portfolios are being invested in the private market, into things like private credit and private debt,” he said.
“We don’t think the momentum is going to slow down. We think it is going to continue accelerating. The theme of more capital moving from the public to the private markets is going to be one that continues over many years, if not decades.”
He said the big growth engines of the past had been companies like Google, Apple, Amazon and Microsoft.
“In the past, investors could benefit from the huge growth in their performance on the market, but these days there is so much capital available in private markets that those early stage companies don’t need to list to raise money,” Mr Chisholm said. “They can raise all the money they need in private markets.
