The Journey of Indosuez in Private Markets

The decision in 2011 to establish an AIFMD-licensed management company in Luxembourg and run discretionary mandates for its clients to support its existing advisory activities was an important catalyst for Indosuez Wealth Management to expand its European and Asian business. Up until that point, the firm had been operating a purely distribution model within private markets on behalf of its wealth clients in Geneva, Switzerland where the entire private equity team was based.  

“In 2011, we grew outside of Geneva, recruiting talent in Luxembourg, Monaco, Paris, Madrid. The model was to be only paid by our investors for the origination, due diligence and the reporting of fund investments. And that was a big milestone for us. Today, we consider ourselves builders of private equity allocations for clients, mainly in mid-market buyouts with a good base of secondaries and co-investments,” explains Olivier Dauman, Global Head of Investor Relations Private Markets.  

As the the wealth management arm of Credit Agricole S.A., Indosuez engages with over 120 general partners, focusing on primary investments, secondaries, and co-investments. With approximately EUR220 billion in client assets, it has supported its clients for more than 150 years and is present in 16 territories, mainly in Europe, as well as in Asia Pacific and the Middle East. 

The launch of its first multi-GP semi-liquid fund in 2020 has helped position the firm to attract a wider base of private wealth clients. Currently, the firm manages four semi-liquid fund solutions, each offering quarterly liquidity, and is preparing to launch an ELTIF 2.0 private debt fund. 

“Our semi-liquid vehicles have EUR500 million in assets,” says Dauman, who is based in Monaco. Prior to joining Indosuez in 2011, Dauman worked for five years at the placement agent, Global Private Equity. “Our evergreen Private Equity Fund has EUR350 million in AUM and we have approximately EUR200 million in our private debt and real estate funds.”  

While Dauman explains that evergreens are a good value add to its clients they are still a relatively small part of its private markets business, which totals EUR11 billion. “Nevertheless, these vehicles are probably one of the fastest growing segments in our product range. We see good appetite, we see strong demand. I think there will be great opportunities for our clients in this space,” he enthuses. 

Discretionary capital represents the majority of its clients capital, who rely on the proven track record and expertise of the Indosuez team in accessing private markets. Clients who are more familiar and have the capacity to invest deeper can choose an advisory mandate, which starts with a EUR3 million commitment, compared to EUR1 million for those who opt for discretionary mandates. 

“We also offer dedicated sub-funds (closed-end structures) for our 50 largest clients, which start at EUR30 million; the largest sub-fund is EUR500 million. So we cover the whole spectrum of private wealth clients from EUR1 million to EUR500 million. Our evergreens are designed as an entry point to the asset class but also those who have been investing in closed-ended funds who want to reinvest distributions without further committing to another 10 years,” states Dauman. 

Strategic acquisitions and a commitment to investing in new technologies to further bolster the operational infrastructure have been key to helping Indosuez innovate its private markets offering to private wealth. Moreover, since Dauman joined the firm, the team has grown six-fold, across investment, portfolio management and investor relations. Technology-wise, Indosuez is using tools such as Chronograph, an AI-based company that helps automate portfolio company data collection and improve transparency for investors, to enhance its data management capabilities. 

“We've also invested in AirFund, a French technology company, which provides a marketplace for GPs and wealth managers. This gives us the ability to showcase all of our products because today we have more than 3,000 clients. We need digital tools to manage that process. One important milestone for us was the acquisition of Degroof Petercam in Belgium last summer. When we reached EUR10 billion in AUM last year, we said that we wanted to double in size in the next four years. We see good synergies with Degroof Petercam for our business to grow. By the end of next year, we should reach the important milestone of EUR1 billion in AUM for our semi-liquid funds,” explains Dauman. 

The expectations are that semi-liquids could represent 50% of every euro or dollar that Indosuez raises within that four-year timeline. This will mean hiring additional product specialists, seeking out new distribution channels and ensuring there is strong after sale service too. By definition, semi-liquid open-ended funds mean that clients can very easily redeem if they do not believe in the product anymore.

“One of the challenges is to keep investors believing in the strategy. Winning the IPEM award for Best Private Bank is a great way to show that Indosuez is well perceived by its wealth management peers,” concludes Dauman.