Saturday 16 December 2017

Sluggish demand for Bank of Ireland Private-KKR fund

Stock photo: Getty Images
Stock photo: Getty Images

Gretchen Friemann

Bank of Ireland Private Banking, which is in the midst of a merger with its parent, Bank of Ireland, is meeting slower than expected investor demand for a €100m fund launched with private equity giant, KKR, earlier this year, according to sources familiar with the negotiations.

It is understood the vehicle, which will invest primarily in private equity deals, but also encompass real estate and private credit, has so far attracted up to €40m.

The speculation about the pace and level of interest in the BOIPB-KKR vehicle, dubbed the Diversified Private Markets Fund, comes as Bank of Ireland subsumes its previously separate private banking arm into its wider operations.

Previously the unit offered a separate, stand-alone service to wealthy clients. The decision to merge the two balance sheets has been widely viewed as a move into a more mass market network.

However Bank of Ireland robustly rejects that interpretation.

In an emailed statement a spokesperson said the merger was intended to simplify "our company structure by making Bank of Ireland Private Banking a business unit within the Bank of Ireland Group, rather than operating it as a standalone Limited Company".

The spokesperson also highlighted "there is no change in relation to existing client products or services, and clients will also continue to be managed by the same Bank of Ireland Private Banking Manager."

The Irish Independent understands clients of the BOIPB received a letter from the bank recently outlining the scope of the changes.

Yet while Bank of Ireland insists it remains focused on high net worth clients, and points to its recent acquisition of Covestone Funds as evidence of its commitment to this elite end of the market, analysts, speaking on background, claim the unit is too small to move the dial.

Bank of Ireland, which has appointed Frances McDonagh - the former head of Retail Banking and Wealth Management, Europe and UK - as its new chief executive, declined to specify how much money has been pledged so far to its KKR partnered fund.

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