Alternative investments
Alternative investments
Podcast
24.10.2023
If you want to make optimal and diversified investments today, you can't go wrong with private equity can hardly avoid private equity. Investing in private companies has long proven to be a lucrative way to expand your portfolio and, above all, to position yourself more securely against crises. This is not least due to the fact that this asset class has performed significantly better than equities, for example, in the past, particularly in times of market distortions.
The popular funds always seem to be subject to certain standards - clear regulations that form their foundation. For example, their term is usually between 10 and 12 years, during which the invested capital remains tied up. Furthermore, this amount is always drawn down gradually over the course of a certain investment period and never directly in full.
It is precisely these standards that the PE Perpetual breaks down and redefines for itself - with unique advantages for investors. As FINVIA's first semi-liquid investment option, its specific characteristics make it an interesting addition to a wide range of portfolios.
Similar to FINVIA PE Selection, PE Perpetual is also a fund of funds. This means that instead of investing directly in a selection of favored target companies, it invests in 2 to 4 target funds with respective portfolios. Beyond this, however, the first differences become clear: the Perpetual not only has an extended term of 15 years, but also has a different focus in its strategy. Instead of primary funds, it initially focuses on secondaries, which are then increasingly expanded to include other structures such as buyout, growth and co-investments.
In detail, this means that by investing in portfolio shares that are considered safe and in established companies, it has an extremely attractive risk/return potential.
However, its semi-liquid structure sets it apart from previous offerings. For example, it dispenses with an extended investment period and directly calls up the capital allocated to it in full. This does not necessarily remain tied up for the term, but only for 36 months. Investors are then free to hold or liquidate their shares - a decision that can be made for up to 20 % of their shares per year. However, in order to protect existing investors from liquidation constraints, this liquidity option only applies if redemptions are not too high.
These differences result in three fundamental advantages for investors compared to the usual range of funds:
This point is made up of the structure of the perpetual as an umbrella fund and the direct capital call for allocation. This means that, on the one hand, investors are more broadly and therefore more securely positioned with a subscription than they would be with an individual fund. Secondly, their contribution can "work" for them in full from day 1, which leads to attractive potential returns and the next point, simple administration.
The fact that the perpetual does not have a longer-term investment phase makes it easy for investors to plan. Instead of having to pay attention to different vintages and payment periods when creating a portfolio, as is normally the case, they know exactly when which amount will be debited once. This makes it a very attractive option both as an individual investment and in combination with other funds.
The fact that the capital remains tied up for at least 3 years instead of 10 opens up a wide range of options for investors. They can request a distribution or decide to use the entire term of the fund. Partial liquidations are also no problem. This is an advantage that can be invaluable, especially in uncertain times or when planning for the future.
Thanks to its special characteristics, the PE Perpetual is attractive to several target groups. The first of these is newcomers who want to build up a secure private equity portfolio. Thanks to the fund of funds, they have the opportunity to position themselves in a more diversified way with just one subscription from €200,000 than would be possible with individual funds under the same conditions. This already benefits wealth under 1 million euros. In addition, the clear administration facilitates the development of a new strategy and makes the fund the perfect - and above all direct - entry into the asset class.
However, advanced investors who already have other subscriptions can also benefit from adding the Perpetual. On the one hand, this is due to its strategy, which is based on secondaries and investments in established companies. On the other hand, its high flexibility and semi-liquid structure make it particularly attractive for this group.
FINVIA PE Perpetual is the ideal solution for anyone who wants more flexibility in private equity or is looking for a secure entry point. Thanks to its less rigid structure and liquidity options, which are unusual for alternative investments, it can be seamlessly integrated into any portfolio and combined with other investments.
On the FINVIA Investment Platform you will find all the information you need about PE Perpetual and our other funds: from detailed presentations and all contractual documents to exciting video material from our investment experts. You can also subscribe digitally at any time - wherever you are and whenever you want.
Alternative investments
24.10.2023
Jan Hoffmann
Private equity is always illiquid - right? With PE Perpetual, FINVIA is now offering a fund for the first time that does away with existing standards of alternative investments and opens up new opportunities. Find out all about its advantages and the special features that make it attractive to a wide range of investors.
If you want to make optimal and diversified investments today, you can't go wrong with private equity can hardly avoid private equity. Investing in private companies has long proven to be a lucrative way to expand your portfolio and, above all, to position yourself more securely against crises. This is not least due to the fact that this asset class has performed significantly better than equities, for example, in the past, particularly in times of market distortions.
The popular funds always seem to be subject to certain standards - clear regulations that form their foundation. For example, their term is usually between 10 and 12 years, during which the invested capital remains tied up. Furthermore, this amount is always drawn down gradually over the course of a certain investment period and never directly in full.
It is precisely these standards that the PE Perpetual breaks down and redefines for itself - with unique advantages for investors. As FINVIA's first semi-liquid investment option, its specific characteristics make it an interesting addition to a wide range of portfolios.
Similar to FINVIA PE Selection, PE Perpetual is also a fund of funds. This means that instead of investing directly in a selection of favored target companies, it invests in 2 to 4 target funds with respective portfolios. Beyond this, however, the first differences become clear: the Perpetual not only has an extended term of 15 years, but also has a different focus in its strategy. Instead of primary funds, it initially focuses on secondaries, which are then increasingly expanded to include other structures such as buyout, growth and co-investments.
In detail, this means that by investing in portfolio shares that are considered safe and in established companies, it has an extremely attractive risk/return potential.
However, its semi-liquid structure sets it apart from previous offerings. For example, it dispenses with an extended investment period and directly calls up the capital allocated to it in full. This does not necessarily remain tied up for the term, but only for 36 months. Investors are then free to hold or liquidate their shares - a decision that can be made for up to 20 % of their shares per year. However, in order to protect existing investors from liquidation constraints, this liquidity option only applies if redemptions are not too high.
These differences result in three fundamental advantages for investors compared to the usual range of funds:
This point is made up of the structure of the perpetual as an umbrella fund and the direct capital call for allocation. This means that, on the one hand, investors are more broadly and therefore more securely positioned with a subscription than they would be with an individual fund. Secondly, their contribution can "work" for them in full from day 1, which leads to attractive potential returns and the next point, simple administration.
The fact that the perpetual does not have a longer-term investment phase makes it easy for investors to plan. Instead of having to pay attention to different vintages and payment periods when creating a portfolio, as is normally the case, they know exactly when which amount will be debited once. This makes it a very attractive option both as an individual investment and in combination with other funds.
The fact that the capital remains tied up for at least 3 years instead of 10 opens up a wide range of options for investors. They can request a distribution or decide to use the entire term of the fund. Partial liquidations are also no problem. This is an advantage that can be invaluable, especially in uncertain times or when planning for the future.
Thanks to its special characteristics, the PE Perpetual is attractive to several target groups. The first of these is newcomers who want to build up a secure private equity portfolio. Thanks to the fund of funds, they have the opportunity to position themselves in a more diversified way with just one subscription from €200,000 than would be possible with individual funds under the same conditions. This already benefits wealth under 1 million euros. In addition, the clear administration facilitates the development of a new strategy and makes the fund the perfect - and above all direct - entry into the asset class.
However, advanced investors who already have other subscriptions can also benefit from adding the Perpetual. On the one hand, this is due to its strategy, which is based on secondaries and investments in established companies. On the other hand, its high flexibility and semi-liquid structure make it particularly attractive for this group.
FINVIA PE Perpetual is the ideal solution for anyone who wants more flexibility in private equity or is looking for a secure entry point. Thanks to its less rigid structure and liquidity options, which are unusual for alternative investments, it can be seamlessly integrated into any portfolio and combined with other investments.
On the FINVIA Investment Platform you will find all the information you need about PE Perpetual and our other funds: from detailed presentations and all contractual documents to exciting video material from our investment experts. You can also subscribe digitally at any time - wherever you are and whenever you want.
About the author
Jan Hoffmann
