Schroders private equity fund added to Macquarie Wrap, uXchange and Xplore Wealth

The Schroder Specialist Private Equity Fund has been added to Macquarie Wrap, uXchange and Xplore Wealth following increased demand from advisers. This brings the number of platforms offering the Fund to five, with Hub24 and Netwealth having recently added it to their menus.

The Fund gives Australian investors easier access to a professionally managed portfolio of private equity investments, an asset class that has traditionally been reserved for only the largest and most sophisticated investors.

Schroders Australia alternatives director, Claire Smith, said that the Fund provides investors with diversification away from listed equity markets, and has a particular focus on small-to-mid cap specialist opportunities in the US and Europe, as well as Asian growth companies.

“By their nature, these companies are at earlier stages in their life cycle and are generally not accessible via listed markets given the high costs associated with public listings. As such this is an area where there is a particularly compelling risk/return trade-off for investors.

“Private equity opens up investment opportunities in a broader universe of companies than those listed on public stock exchanges – providing access to companies that are diverse in stage and size – and are otherwise difficult to access.”

Schroders head of distribution, Graeme Mather, said in the current climate of lower interest rates and elevated equity market valuations, some investors are looking for new ways to generate returns and are seeking diversification away from traditional listed equity and fixed income markets.

“Private equity is one solution for these investors.

“The Fund aims to generate an absolute internal rate of return of 10% to 12%, net of fees, over periods of five years and longer, which can be attractive for an investor with a long-term investment horizon.

“While private equity funds are typically illiquid, with investors generally only able to realise their investment at the end of a fund’s life, our unique structuring solution allows investors a degree of liquidity as they can apply to redeem on a quarterly basis. This liquidity has its limitations, including a cap on net redemptions each quarter, but has still proved popular with advisers and their clients,” he said.

The Fund has a “Recommended” rating from Zenith and an “Investment Grade” rating from Lonsec.