The group will be headed by Rothschild veteran Jessica Sellam, who joined in 2006 and was most recently the firm’s head of private assets advisory and discretionary mandates and business development for private banking in France, Belgium, and Monaco.
23 May (Preqin News) – Rothschild & Co has set up a new private markets group in its wealth and asset management division. The 200-year-old bank is the latest wealth manager to step efforts up to provide clients with access to private equity, debt, and other alternative asset classes.
The group will be headed by Rothschild veteran Jessica Sellam, who joined in 2006 and was most recently the firm’s head of private assets advisory and discretionary mandates and business development for private banking in France, Belgium, and Monaco. She said: “There is increasing interest from our Wealth Management clients in Private Markets’ products and we have a wealth of expertise across the Group that we will be able to harness for their benefit.”
Wealth managers have among the highest allocations to private equity of the investors tracked by Preqin, with an average current allocation of 16% and a target of 18%, compared with 12% and 13%, respectively across all investor types, according to Fundraising from Private Wealth: A guide to raising capital, a Preqin Insights+ report. However, wealth manager allocations lag some way behind single family offices, which have an average current allocation of 27%, against a 29% target.
In a 2023 report, consultancy Bain & Company noted that, across the $140-150tn private wealth universe, only ultra-high-net-worth individuals and family offices (defined as having assets of more than $30mn) had allocations of more than 5% to alternatives. The mass affluent ($0.1-1mn) and high-net-worth ($1-5mn) categories had virtually no allocations to private markets. Bain said that, while 50% of the estimated $275-295tn of global Assets Under Management (AUM) was held by individual investors, they account for just 16% of AUM held by alternative investment funds.
Across the Atlantic, Fidelity Investments is also beefing up its alternatives platform. The financial services heavyweight, which has more than 40 million customers, on Monday announced the launch of the Fidelity Multi-Strategy Credit Fund aimed at giving a route to market for financial advisors. It is the 18th alternatives product Fidelity has launched in the past 12 months and the firm now has 35 alternatives funds with AUM of $9.8bn. While alternatives funds represent just 0.2% of Fidelity’s total discretionary assets AUM of $4.2tn, total alternatives AUM has increased by 70% since 2020.
In a recent report, Boston Consulting Group (BCG) said that the asset management industry had reached a turning point and needed new strategies to return to historic rates of profit growth. BCG suggested that increasing investments in alternatives, which account for 21% of global AUM but generate 50% of revenues, was one way of reversing the recent decline in profit compound annual growth rate (CAGR). Asset managers’ CAGR could drop to around 5%, approximately half the average of recent years without a shift in approach, the report’s authors said.