Prime Highlights-
- Wealthy entrepreneurs raise private market investments as private equity and venture capital holdings near public equity levels, HSBC survey shows.
- Half of private equity fund investors plan to increase holdings over the next 12 months, showing strong private market appetite.
Key Facts-
- 60 percent of Gen Z entrepreneurs plan to grow private holdings versus 44 percent of Gen X.
- Experts advise pairing direct deals with diversified funds and independent due diligence to manage risk.
Background-
Wealthy entrepreneurs are raising their private market investments, with private equity and venture capital holdings nearing the level of their public equity holdings, according to a new survey from HSBC Private Bank.
Half of existing private equity fund investors plan to increase their holdings over the next 12 months.
Mathieu Forcioli, global and Asia-Pacific head of alternatives, wealth and premier solutions at HSBC in Hong Kong, said entrepreneurs know the economics, operating risk and value-creation paths of private firms. He added that companies now stay private for longer, so investors must look beyond public markets to reach fast-growing businesses.
Forcioli said entrepreneurs judge deals through an owner’s lens. They focus on management quality, the route to profitability, customer concentration and the exit path. He advised pairing that insight with disciplined portfolio building and independent due diligence.
Charlotte Thorne, founding partner at Capital Generation Partners in London, said entrepreneurs often need both direct investments and blind pool funds. Direct deals offer agency and specialization, while funds bring professional management and diversification. She suggested a barbell approach, with direct deals in familiar sectors and diversified funds for the rest.
Forcioli said private market money should come from long-term opportunity capital. The survey found 60 percent of Gen Z entrepreneurs with direct private holdings plan to increase them, compared with 44 percent of Gen X. Hannes Hofmann of HSBC Private Bank said younger investors have longer time horizons that suit direct investments.