HSBC Global Private Banking (GPB) had another record year for alternative investments in 2021, raising around $3.2 billion in private client commitments globally.
This is up on the $2.3 billion the bank raised in 2020. This included $1.9 billion from Asia, while EMEA recorded $1.3 billion.
The uptick was driven by a continued momentum in hedge funds, coupled with a strong performance across private markets, where, in addition to clients in Asia more than doubling their 2020 aggregate commitments, the bank increased the accessibility of its product offering across its European markets.
The bank’s record year comes as private markets globally continue to soar. According to PwC, assets under management in private markets are expected to increase by around $5 trillion by 2025, totalling around $15 trillion. Meanwhile, in a 2021 survey of 2,500 UHNW investors, EY found that more than four-fifths were tapping into alternative investments.
Clients looking to safeguard their investment portfolios from market volatility and inflationary concerns are using alternatives to diversify their portfolios. Lavanya Chari, HSBC’s Global Head of Investments & Wealth Solutions, said: ‘This year we aim to broaden our alternative investments offering to also meet the long-term investment demands of our personal banking and Premier customers, while improving solutions for top tier UHNW clients through the introduction of new bespoke and dedicated services.’
Partnering with HSBC Alternatives, HSBC Asset Management’s (HSBC AM) alternatives team, the private bank has offered alternative investments globally for over 30 years, including hedge funds, private markets and real estate. HSBC Alternatives has $54 billion of assets under management and advice.
Through close collaboration with HSBC AM, Global Private Banking supplements its well-established hedge funds offering with an annual pipeline of investments across private markets. This provides clients with diversification across transaction type (primary, secondary, co-investment), sector, geography, as well as diversification across the capital structure.