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New private bank to increase options for high net worth sector Back  
High net worth individuals in Ireland are looking for greater investment diversification, and a new joint venture between one Dublin firm and Deutsche Bank, will give them access to global opportunities in more esoteric investment products such as CLOs.
Key Capital, the Dublin based corporate finance boutique, has launched a joint venture with Deutsche Bank, to provide private wealth management services to high net worth individuals (HNWI) in the Irish market. The joint venture is expected to commence in the first quarter of 2006, pending regulatory approval, and the business will be co-branded by Key Capital and Deutsche Bank.

According to the latest Merrill Lynch/Cap Gemini World Wealth Report, there are now 15,000 millionaires in Ireland, and their numbers keep on growing.

The new venture, which will be headed up by Conor Walsh, formerly of Bank of Ireland Private Banking, will provide investment opportunities in areas such as private equity, real estate, hedge funds and Inital Public Offerings (IPOs), as well as traditional investment products. Walsh also points to emerging investment areas such as collateralised loan obligations (CLOs).

According to Walsh, the venture represents a significant opportunity for Key Capital to provide innovative, international, investment products for the Irish market, where a lot of the products currently on offer tend to be quite localised. ‘Key Capital is leveraging off a significant local expertise combined with a strong global market knowledge,’ says Walsh. The Irish company predicts that it will recruit between fifteen and twenty new staff within the next two years to work in this new area.

The project highlights the new global direction that private wealth management is taking. ‘High net worth investors are seeking strategies that provide the most efficient return, whilst also offering diversity, both in terms of assets and geography,’ says Walsh.

John Rockett, head of private banking at Allied Irish Bank, takes a similar view. He believes that the phenomenal wealth generation in Ireland in recent years has resulted in the top five or six per cent of the population investing heavily, especially in the property arena. However, he says that these HNWIs are now seeking a greater degree of investment diversification.

Martin Cass, director of NCB Wealth Management, says that HNWIs have become more sophisticated in their investment needs. He says, ‘The current low interest rate environment is supportive of many asset classes and certainly adds to the appeal of private equity and derivative investments, which often employ high amounts of gearing to enhance returns. While this makes them attractive, it also brings added risk. However, there are now a number of private equity funds available to high net worth investors, which diversifies company specific risk.’

He expects commodity-based investments, private equity and derivative products such as Contracts for Difference (CFDs), to all grow in popularity with investors.

However he stresses that no two investors have the exact same investments needs and so these products may not be right for everyone.

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