Public investments may lack attractive returns. Illiquidity from conventional alternatives may be hard to stomach for some. Semi-liquid funds are a good balance between the two and wealth clients are increasingly showing interest.
Private banking clients are increasingly showing interest in adding exposure to investment products that are semi-liquid, according to panelists at the «Wealth Management Summit» by FT Live and PWM. While such products may be relatively illiquid, fixed income investors in Asia may not mind due to the approach many have historically taken.
«Semi-liquid [solutions] generate yield as lock-ups are longer than for usual public fixed income investment. However, a lot of clients treat bond investment as a long-term hold. So part of that being illiquid is okay for them,» said Ulysses Lau, head of investment and engagement, Asia at J.P. Morgan Private Bank, during the panel.
Improved Transparency
In addition to an appetite for illiquidity, investors may also benefit from the greater transparency of semi-liquid products compared to conventional alternatives.
«An investor who puts in $1 million will be able to see each month how much product NAV it is trading,» commented Gustav Segerberg, head of business development at EQT Group. «They can track it, see how that actually looks and compare it with other semi-liquid products. I would say that this actually helps from a transparency point of view.»
