Belfast Telegraph

Bank of Ireland 'on course to raise €100m for fund'

By Gretchen Friemann

Bank of Ireland is likely to successfully raise €100m for a new flagship programme set up in partnership with KKR, the global buyout firm.

It is understood the lender has attracted sufficient commitments from clients to conclude the deal by the end of the month.

Success in raising the funds would mark an important milestone for Bank of Ireland's private arm as the first such venture since the crash hit almost a decade ago.

However, expectations that wealthy clients would stump up commitments of €1m to €3m each, typical in the pre-crisis era, proved wide of the mark.

The average investment into the new fund was €400,000 to €500,000, according to sources familiar with the matter.

These smaller than anticipated individual commitments mean a far larger number of investors has signed up to the new Diversified Private Markets Fund.

Bank of Ireland Private, which was merged with the group earlier this year, sourced capital for the venture from its own clients and from elsewhere within the group.

It is understood a parallel fund, housed within Bank of Ireland Life, helped bolster the new vehicle.

Bank of Ireland Life is run by Sean O Murchu, the former head of the private bank.

The anticipated conclusion of the fundraiser comes amid a worldwide shift into alternative assets such as private equity as investors hunt for better returns on their money in a low interest rate environment.

The Bank of Ireland/ KKR venture also underscores the depth of appetite among well-heeled retail investors for a sector dominated by institutional and ultra wealthy worth investors.

In exchange for locking up their cash for 10 years, the clients receive an illiquidity premium, with the annual return expected to range between 10 and 12%.

KKR recently revealed a drop in its third quarter profits, compared with the same period last year, but the buyout behemoth also unveiled a 17% expansion in assets under management, to $153bn.

Belfast Telegraph

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