Private equity, or investing in the capital or equivalent of unlisted companies, is a long-term investment in promising businesses.

We select players who give you the opportunity of investing in innovative areas, or sectors that are seeing rapid growth or restructuring, whilst always focusing on projects supported by rigorous management, appropriate financing, the quality of the founders or management team and proven growth prospects.

These products are again generally reserved for experienced investors as they are long-term investments with no possibility of early withdrawal.

As global financial markets become increasingl complex and interconnected, new opportunities continue to emerge for high net worth and institutional investors to grow, manage and preserve their wealth. Traditional investments alone may no longer provide the returns, stability and diversification these sophisticated investors seek, and many have turned to a growing array of alternative investments to provide new solutions.

Among the various alternative investments available today, private equity has demonstrated a strong potential to deliver superior investment returns. The industry has drawn the attention of high net worth investors and entrepreneurs alike, growing into a US$2.3 trillion industry today. Indeed, private equity has become a major force in economies around the world.

HSBC Private Bank sees private equity as a strategic part of a diversified portfolio, alongside traditional stocks, bonds, cash instruments and other alternative investments. Allocating a portion of a portfolio to private equity investments may contribute to achieving an optimal asset allocation, which is widely accepted to be one of the most important determinants of a successful, long-term diversified investment strategy.

Private equity is a broad term that refers to capital invested in companies not listed on a public exchange.

Private equity investments are an important source of capital for new and emerging firms, distressed firms, and both private and public firms in need of capital. One reason is that private investment avoids the cost associated with pursuing a public stock offering; another is that private equity securities are not regulated as stringently as are public securities.

In addition, private equity investors, such as professional venture and buyout firms, institutional investors and high net worth individuals, can provide capital in situations where traditional lenders lack the necessary expertise. In these cases, private equity investors can be a valuable resource to these private companies, whether the companies are seeking to develop an initial business idea, expand a business or reconfigure it to become more profitable.