People with millions of dollars at the ready can invest in private equity deals through a new programme set up by DBS Private Bank.
PE Access, as the programme is called, is tailored for those seeking alternative forms of investment, have a higher appetite for risk and prefer to have direct access to the businesses they are investing in. The programme, which has a minimum deal size of $5 million, is available only to bank clients with a net worth of at least $50 million.
"Our Asian customers are generating wealth in the areas that they do well in and know best. And they want to put their money where their mouth is," said Ms Tan Su Shan, DBS' head of consumer banking and wealth management.
Ms Tan, speaking yesterday at an event organised by the Asean Private Equity Venture Capital Association, added that many people in the region tend to want to invest in businesses in their own sectors.
A real estate tycoon will tell her that he is interested in buying a certain building, or a shipping magnate will want to pick up a fleet of second-hand ships.
"We are in the position to show deals to people who care about these deals," said Ms Tan.
Under PE Access, clients will be told of relevant deals which they can invest in directly after doing their own due diligence.
DBS said it is the first Singapore bank to offer such a programme.
Ms Tan believes there is great potential for further growth of private equity and venture capital deals in the region.
The Asean Private Equity Venture Capital Association's event yesterday involved four industry professionals discussing whether private or public equity will bring investors in the region better returns in the next decade.
Experts in the private equity sector argued that many of the businesses listed on the stock exchanges are in sectors such as real estate, industrial and resources, which are companies of the past.
Mr Anil Ahuja, chief investment officer at Indian financial services firm IIFL Holdings, said the business of businesses is changing. He said "new" firms which are disruptive and transformative in nature are not publicly listed.
He sees many "new economy" companies emerging in Singapore because of the various government initiatives. These provide opportunities for private equity investors.
"What we need is to see a few example of success stories, and I'm hopeful that it would happen," said Mr Ahuja.
Equity fund managers, on the other hand, said private equity investments tend to need a much longer time - around six to seven years - to determine if they turn out to be profitable or otherwise.
Such investments, unlike investing in publicly-listed companies, also tend to be a lot less transparent.
Ms Catherine Tan, founder of hedge fund Saga Tree Capital Advisors, said the public markets offer investors more access to information and knowledge.
And investors have the option of going long or short on the equities, while having the chance to tap private equity opportunities through public companies that invest in these deals.
