PE Key Trends Blog

HNWIs & Their Representatives - FOs, RIAs, Private Banks - Rapidly Increase Market Share, Palico Reflects This

Apr 21, 2017 10:12:59 AM

Tags: Private Equity Market, V2

High net worth individuals and their representatives, including family offices, registered investment advisers and private banks, account for 31.8 percent of the 2,826 accredited investors from over 80 countries looking for private equity fundraisings, secondaries and co-investments on Palico. That they account for almost a third of investors on Palico isn’t surprising. Data from the U.S. Securities and Exchange Commission indicates that HNWIs are growing their share of private equity investment faster than any other type of investor.

While HNWIs and their representatives taken together are the largest grouping among Palico’s limited partners, they are part of a diverse tapestry. Pension funds, gatekeepers and funds-of-funds each account for 10 percent or more of Palico’s accredited investors, while even the smallest grouping (150 investors from foundations and endowments) are more than 5 percent of LPs.

HNWIs' Market Share Gain Surpasses Increase for Sovereign Wealth Funds

The SEC’s "Private Funds Statistics" quarterly collects data on large private equity managers, those with $2 billion or more in fund assets, and is interesting reading for those following PE trends. Covering $1.4 trillion in private equity funds, the reports show that HNWIs in the U.S. increased their market share of PE assets 16.9 percent between March 2013, when the SEC began tracking statistics, and June 2016, the most recent period for which statistics are available. High net worth individuals based outside the U.S. saw their market share of PE assets rise 13.6 percent. The only other clearly identifiable group to register a double-digit gain were sovereign wealth funds, whose market share rose 10.3 percent in three years. Overall, HNWIs account for 9.4 percent of private equity fund net asset value today, up from 8.2 percent when the SEC began tracking PE. SWFs have 9.6 percent of net asset value, up from 8.7 percent.

Palico Simplifies PE Investment for Everyone

As private equity’s activist, micro approach to investment in today’s slow growth, low interest rate environment attracts not only HNWIs, but investors of all types, Palico makes PE easier for both limited partners and general partners. Its online marketplace streamlines discovery, analysis and private equity investment.

"With Palico we stay on top of investment opportunities across the globe and across specialties."

Gonzalo Eguiagaray, Associate, Arcano Group