Private Market Solutions
 

Private market solutions

Access to private markets

 
As a professional investor, take advantage of our access and experience in direct private market investments. Private market investments have a positive effect on the risk/return ratio of your portfolio through access to alternative sources of return and risk.

Our strong network enables us to offer you access to specialised fund managers and direct private market investments in the areas of private equity, private debt, infrastructure and real estate.

What are private market investments?

Private market investments are capital investments that are not publicly traded on a stock exchange. They comprise acquiring stakes in and financing companies (private equity and private debt) as well as investments in real estate and infrastructure projects. Private market investments differ from publicly traded securities in the following respects:

  • Liquidity
  • Access to investment opportunities
  • Availability of information
  • Number of investment opportunities

In most cases, private market investments find their way into a portfolio by means of collective vehicles (limited partnerships) or as direct private market investments.

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The advantages of private market investments

Private market investments have grown to be an integral part of the portfolios of institutional and professional investors, as they offer advantages in the following areas:

Return

We are of the opinion that private market investments have a return advantage over publicly traded securities. This is justified by the liquidity premium and the exploitation of market inefficiencies.

Diversification

The bulk of the economy consists of private market investments, as the majority of companies (e.g. SMEs) are not traded on the stock exchange. The asset class therefore offers access to a wide range of alternative sources of risk and return. For example, companies in the start-up phase are not traded on a stock exchange and therefore have no way of becoming a part of a traditional portfolio. Venture funds make it possible to include such investments in an allocation. The synchronisation (correlation) with public markets is reduced or even non-existent in many private market areas (e.g. litigation finance), as the pricing drivers are not or not primarily influenced by stock market prices. This, in turn, increases the stability of the portfolio as a whole.

Price fluctuation

As collective price finding mechanisms by a large number of market participants is non-existent for private market investments, prices are estimated either on request or on extended time intervals (quarterly, semi-annually). This valuation process prevents irrational and erratic price distortion affecting the portfolio value.

The services we offer in collective private market investments

Portfolio construction
Support in the creation of the appropriate portfolio composition with the inclusion of private market investments
Fund selection
Selection and screening of private market managers
Monitoring
Monitoring of selected private market managers

VP Bank itself invests in the selected private market managers on the recommendation list, ensuring that our objectives are aligned with yours as our client.

Our offering in direct private market investments

The characteristics of direct private market investments differ from those of collective/indirect private market investments, such as private equity funds. The crucial factor for the investor or group of investors (club deals) is the option to directly influence the economic success of the investment. Precise investment decisions can be enabled through other parameters, such as international diversification, flexible sale of the investment, exclusively financial or possibly strategic considerations, the method of financing, and so on. It is necessary to prepare and execute these well, regardless of whether you are on the buy or sell side.

Typical transactions include:

Participations
Purchase or sale of stakes in companies
Co-investment clubs
Creation and maintenance of co-investment clubs or structures typically used in capital markets
Project funding
Financing of projects on both the equity capital and debt capital side
Real estate purchase/sale
Purchase and sale of individual real estate properties or entire real estate portfolios
An excellent network

A key factor for success is direct and confidential access to the relevant market participants and unmediated contact with decision-makers. The Direct Private Markets team enables dedicated access to a wide range of opportunities and partners from family offices, entrepreneurs, financial intermediaries and institutional investors.

Sustainability

Sustainability criteria play a central and defining role in the closely monitored sectors. Topics that typically receive particular attention include renewable energy production, health, sustainable food production and water topics, as well as real estate with socio-economic relevance. Of course, other industries and sectors will also be considered at the request of our clients.

Tailored to your requirements

We ensure success in implementation by finding the right structure and form (e.g. funds, special-purpose vehicles, foundations, tokens) in a coordinated manner. Naturally, we can also use your existing investment vehicles.
Our overall priority is to achieve a flexible and tailored solution for our clients.

Disclaimer

The above information does not constitute a personal recommendation to buy, hold or sell private market investments, nor does it constitute legal, financial, accounting or tax advice, or any form of personal advice. Private market investments may be unsuitable depending on an investor’s investment objective, time horizon, risk tolerance, risk capacity, and financial and individual circumstances, as well as due to sales restrictions associated with the private market investment. This information is therefore no substitute for individual advice from an expert or for studying the product-specific documents (e.g. prospectus, information memorandum, shareholders’agreement, term sheet, subscription agreement, etc.).

Private market investments are special, non-standardised forms of investment that are not intended for a wide audience, and are associated with additional risks (e.g. liquidity, settlement, advance performance and business risk of the issuer) that may result in the total loss of the amount invested. Furthermore, they are intended only for investors with sufficient experience, knowledge and expertise to qualify as a “professional client” within the meaning of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on Markets in Financial Instruments (MiFID).