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Private equity

At HSBC, our investment approach in private equity is focused on selecting and investing with the “best in class” managers. In our view, these top-performing managers can offer our clients significant rewards for the risks associated with the less accessible nature of private equity.

Private equity involves owning shares or interests in companies that are not listed on public stock exchanges. This type of investment can offer higher returns compared to more traditional investments, and it allows investors to have a specific stake in a company under well-monitored conditions.

  • Co-investment with experts: The chance to invest alongside leading entrepreneurs, investment managers, and industry experts who have substantial personal wealth in the same funds
  • Portfolio diversification: Private equity funds are actively managed funds of private companies, offer investors the chance to achieve uncorrelated attractive returns. They allow for investment across different vintages, sectors, geographies, and strategies
  • Unique access: Opportunity to access top-tier managers that are typically unavailable and have historically been exclusive to institutional investors
  • Expanded opportunities: Private equity opens up access to an expansive array of opportunities, especially within the emerging markets and technology sectors
  • Decreased market fluctuation: Exhibit lower valuation volatility in comparison to other asset classes
  • Strategic timing advantage: Private equity managers benefit from the advantage of timing, needing time to fulfil their investment goals, unlike the public markets
  • High growth potential: Private equity offers considerable potential upsurge, driven by the patient long-term capital approach which sidesteps the short-term, quarter-to-quarter focus of public companies. Although there is a perception that private equity primarily aims at cost reduction, these strategies usually concentrate on executing long-term expansion plans to improve revenue and EBITDA growth

Private Equity at HSBC

Our offering

Our extensive network, rich experience, and solid reputation in the market enable us to offer our clients consistent access to high conviction investment solutions tailored to their current and future needs. We provide a variety of solutions across primaries, secondaries, and co-investments through our renowned annual discretionary private equity program and access to a range of high conviction leading private market vintages. For our UHNW clients, we offer access to special exclusive investment opportunities, tailored to your investment knowledge and risk appetite.

For further details, please reach out to your Relationship Manager.

Please note that our offerings may vary by region.

What is Private Equity?

Whether you’re an entrepreneur, a business professional, or simply curious about private equities, this video will demystify the concept, discuss its key principles, and explore the considerations to be taken when thinking about investing in private equity.

Watch the video: Why Private Equity can reshape your investment portfolio

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Risks of investing in private markets

The value of investments and any income from them can go down as well as up and investors may not get back the amount originally invested. Past performance information presented is not indicative of future performance. The return and costs may increase or decrease as a result of currency fluctuations. 

  • Liquidity Risk - Investors may be unable to dispose of an investment quickly and at a price that’s closely related to recent similar transactions. There is no guarantee of distributions and no established secondary market.
  • Event Risk - A significant event may cause a substantial decline in the market value of all securities. 
  • Long-term Horizon - Investors should expect to be locked-in for the full term of the investment, which is subject to extensions.
  • No Capital Protection - Investors may lose the entirety of invested capital.
  • Unpredictable Cashflows - Capital may be called and distributed at short notice.
  • Economic Conditions - Ability to realise/divest from existing investments depends on market conditions and the regulatory environment.
  • Risk of Forfeiture - Failure to make call payments could result in forfeiture of commitment, including invested capital, without compensation.
  • Default Risk - in the event of default investors risk losing their entire remaining interest in the vehicle and may be subject to legal proceedings to recover unfunded commitments.
  • Reliance on Third-party Management Teams - Underlying investments will be managed by various third-party management teams that will in aggregate determine the eventual returns for the investor.

The risk factors listed above are not exhaustive, always refer to product specific documentation for full details and risk disclosures.

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