Private equity is not just a million dollar investment. Boutiques and fintechs collect the capital of wealthy investors in order to invest it.
PWith minimum investment sums in the millions, private equity is rightly regarded as an asset class reserved for large private or institutional assets. In recent years, however, efforts have intensified to provide access to less large private assets. “The institutional customers have largely been scanned by the private equity funds,” says Alexander Binz, co-founder of the private equity boutique Circle Eleven. “Everyone is currently trying to attract private investors with very high assets. Blackstone started introducing itself to country clubs years ago. So there is a tendency to open up to private investors. “
Circle Eleven and a small number of other providers in Germany have been giving private investors access to private equity investments for a good 20 years. Around every three years, the shareholders of Circle Eleven set up a limited partnership. They use this to invest successively in ten private equity funds. External investors then have the opportunity to join the exclusive circle. Usually these are regular customers or investors who have been recommended by them. External investors do not have to invest in each of the funds. There are all kinds of constructions, says Binz. Some spread their investment evenly across all funds, while others may only be involved in two.