Bank of Ireland Private Banking has launched a new multimillion-euro fund for its high-net-worth clients in partnership with international investment group KKR.
Called the Diversified Private Markets Fund, it will seek to raise close to €100 million and will be two-thirds invested in private-equity assets, with the balance being private credit and real estate.
All of the money will be invested in assets outside Ireland with the bank targeting annual returns of 9-11 per cent.
It will be a Dublin-based qualifying investor fund and is open to existing and new high-net-worth clients of Bank of Ireland Private Banking, who typically have €1 million in investible liquid assets. It is expected to be a 10-year investment.
In parallel with this, the Bank of Ireland unit will shortly begin distributions to clients from a commercial property investment in South Korea dating back to 2006.
More than €140 million is expected to be distributed to a small number of clients who invested in IFC Seoul, an international financial centre involving three high-rise, glazed buildings, a retail mall and a Conrad hotel.
Reports in 2006 suggested Bank of Ireland’s clients had invested €50 million in what was then a greenfield development.
The bank would not confirm any of the financial details of the transactions other than stating that it had delivered a return of about 2½ times for its clients over the period.
IFC Seoul was an investment managed by AIG Global Real Estate, with the Bank of Ireland clients part of a much wider pool of investors in the complex.
It was sold by AIG to Brookfield in November for an undisclosed sum.
Tender process
In terms of the new investment opportunity, KKR was chosen to manage the fund following a tender process. "Their capability is immensely impressive," Kevin Quinn, director at Bank of Ireland Private Banking, told The Irish Times.
“They’re one of the blue bloods in this space. It is targeting allocations to private equity, to private debt and smaller allocations to real estate. The intent is that it will have allocations to KKR funds and also to external funds.
“KKR will select third parties as well. And there will be co-investment opportunities alongside KKR. It’s a fund bespokely built for private investors in Ireland.”
It will be a global mix of investments, across the United States, Europe and Asia with an "appropriate level of diversification", Mr Quinn said. The fund is expected to close to investment in March.
According to KKR’s website, it has more than $131 billion (€122.4 billion) in assets under management. It had 119 portfolio companies in its private equity funds that generate $200 billion in annual revenue and have more than 720,000 employees.
The launch of this fund follows research by Bank of Ireland over more than 15 months to determine what return profile might be possible for clients from these asset classes.
Bank of Ireland Private Banking was set up in 1989 and has about €4 billion in assets under management.
