Perth-based Integro Private Wealth is in the process of formulating a suite of fund-of-fund offerings aimed at SMSF members and high net worth individuals.
Specifically, the investment manager is looking to open opportunities in the private wealth space for these two cohorts given the interest they are already showing in the asset class.
“Historically the industry funds and endowment funds have played in that space, mainly really to close down deals, but you needed a different liquidity profile to participate and you needed to potentially have your money locked up for a significant period of time,” Integro Private Wealth partner Tim Sullivan told selfmanagedsuper.
“But over time we are starting to see that change where there are more and more evergreen-type funds that might be offering monthly liquidity so you’re starting to see offerings coming right down from industry funds to self-managed super funds and the more affluent in the community.”
Sullivan pointed out access to private markets will give SMSF members a wider universe of companies and equities in which to invest, seeing only 15 per cent of companies in the United States with earnings in excess of US$100 million are publicly listed.
“So 85 per cent of companies with earnings of over US$100 million are on the unlisted market so from an investment universe point of view that’s significant. Also since the 1990s the number of listed companies in the US has fallen by 40 per cent,” he said.
Integro has commenced the initiative through a relationship with Spire Capital.
“We’re engaging their services in a way like an asset consultant. So they will determine the funds we will be looking at from the side of private markets, private equities and venture capital, and perform the due diligence for specific funds,” Sullivan explained.
“Then they’re building more of an evergreen fund, which has a fund-of-fund-type structure.”
According to Sullivan, a 10 per cent to 15 per cent allocation to a fund-of-fund product has in the past been able to generate higher return and reduce the volatility of a portfolio.
The wealth manager will be looking to incorporate a minimum investment amount of $25,000 for SMSF trustees who want to take part in its offerings.
