The Future Is Private: Unlocking the Art of Private Equity in Wealth Management

Anna Zakrzewski Edoardo Palmisani Giovanni Covazzi Brian Teixeira Bruno Bacchetti Marco Bizzozero Kunal Shah Theresa Boehler Federico Rizzato

Boston Consulting Group in collaboration with iCapital

Due to the still relatively low interest rate environment as well as overall market performance, wealth management clients are on the lookout for alternative sources of revenue and portfolio diversification. To achieve these goals, individual investors are increasingly willing to consider for their portfolio illiquid assets like private equity.

Despite the willingness of all actors in the value chain to increase the amount of capital coming from individual investors, some barriers, from both the wealth management and private equity sides, have historically dramatically lowered the ease of doing business.

To name a few, the limited access to high-quality funds, the manual, paper-based subscription, or fund-reporting challenges as well as a lack of education on the asset class

To overcome these barriers, we have developed a systematic approach that wealth managers can play to succeed in scaling up their client service model for private equity, strongly leveraging technology:

- First, wealth managers must clearly define their strategy toward alternative investments, setting priorities in terms of target clients and product offering.

- Then, they must strengthen their key service model around three critical components: access to deals, advisory & sales, and servicing & after-sales management.

- Lastly, as high-net-worth clients still seek the advice of their trusted relationship managers and are relying on their expertise and knowledge when it comes to investing in this highly complex asset class, salesforce enablement and education plays a vital role in succeeding.

The wealth management private equity opportunity is here, and it requires the key market actors to act boldly to catch the upside.