You offer a dedicated investment fund for China. What are the characteristics that make this country interesting?
Sascha Wullschleger: «The majority shareholder of the BIL Group is the Chinese Legend Holding, with a 90% stake, while 10% is in the hands of the Grand Duchy of Luxembourg. Legend, founded in 1984, is an investment holding company with interests in various economic fields, such as information technology, finance and real estate. Its best known subsidiary worldwide is represented by Lenovo, in which it is the largest shareholder with a stake of 30,6%. Thanks to Legend Capital, a Venture Capital company founded in 2001, and in collaboration with Legend Star, BIL Group is able to offer qualified investors a Private Equity product that invests directly and solely in Chinese companies. Given the potential of this type of company, this is an opportunity not to be underestimated for those who want to look out and invest in a country like China. The fund targets Chinese companies active in sectors with high growth and high potential, such as IT, consumer goods, green technology, healthcare and the production of digital equipment and services ».
Can you tell us about this alliance and what are the operational implications?
Geo Pini: «For us at BIL it is important to be able to enhance the vision of our majority shareholder and this alliance, which is strategic from both a financial and commercial point of view, by seizing all the opportunities that are granted to us. In particular, as in this specific case, that of offering our qualified clients, as well as Family Offices, trustees and investment funds, a dedicated product that invests only in China, a market that is not easy to approach for those who do not have the necessary knowledge ".
This collaboration allows you to benefit from Legend's enormous knowledge of the Chinese market. What are the advantages that this particular position offers you?
Sascha Wullschleger: "For us at BIL Suisse it means combining the Swiss tradition (benefiting from the private banking model, located in the three main Swiss financial centers), the European root (Banque Internationale à Luxembourg was founded in 1856 and is the oldest bank private sector of the Grand Duchy) and oriental expertise (strong presence in China and competence in service to Asian customers thanks to our relationship with Legend Holding) ».
You presented the fund in a conference held at the end of September in Lugano. How is it structured? Which sectors are you focusing on and why?
Florent Saint-Quentin: «BIL PE II China is an investment fund that offers access to the private equity sector in the country through various investment and thematic phases. The fund leverages BIL's exclusive access to Legend Capital and Legend Star to deploy capital in sectors affected by China's five-year financial equalization. The breakdown is as follows: 40% in Legend Capital Fund IX, which will emphasize Venture investments in technology, media and telecommunications; 40% in Legend Capital HC III, which will focus on initial growth and venture capital investments in healthcare and 20% in Legend Star Fund III, focused on early stage investments in Artificial Intelligence, Technology, Media & Telecom and Healthcare ».
What have the returns been so far and do you have any performance goals for the future?
Florent Saint-Quentin: «BIL PE II seeks to generate 15% of net IRR per year and will leverage various factors. First and foremost, Legend Capital has been able to achieve a steady and strong track record of around 20% net IRR per year since 2001, despite all the economic cycles. Additionally, Legend Star has built a net IRR track record of over 30% since the beginning of 2008. Finally, BIL PE I, a similar program issued in 2019, has already achieved a net IRR of 14% despite COVID 19 and although continuing to employ capital ".
Do you plan to expand the fund in the future or to create similar ones?
Florent Saint-Quentin: "BIL is currently exploring some options for establishing potential partnerships and extending its investment offering in private markets."
What are the benefits and risks of this type of investment?
Florent Saint-Quentin: «Alternative investments generally present high risks and it is the investor's responsibility to ensure that these are in line with his personal and financial situation. There is a lack of transparency as investors have little information available to them and fund strategies can be very complex and structured. Furthermore, there is a lack of liquidity: the investment has a lock-up period of up to 10 years or more and a possible loss of principal: past performance is no guarantee of future results. The benefits are to offer clients exposure to various stages of PE investment and high yield themes in China and provide exclusive access to Legend Capital and Legend Star. In this sense, BIL is the only bank in the world to offer products usually reserved for institutions and access to high-level PE companies with an attractive minimum amount of $ 150.000 versus $ 15 million for direct investments. Finally, it aims for double-digit net returns (15% + pa) by leveraging the solid and proven track records of Legend Capital, Legend Star and BIL PE I ».
What are the reasons for your presence in Ticino and what services and products do you offer to local customers?
Geo Pini: «Switzerland ranks first in the world for wealth management and is the leader in cross-border private banking, taking advantage of factors such as long-standing political stability, a strong economy and a secure currency. In this sense, Lugano is the third largest financial center in Switzerland, after Zurich and Geneva. It is therefore a duty to also be present in Ticino. In addition to the classic banking services of Private Banking, asset management and external managers, we offer a complete range of professional treasury and financial market products aimed at individuals, entrepreneurs and Family Offices, as well as Leverage Loans, Private Debt, shareholder financing and CrossBorder Mortgage financing in 14 European countries ».
What are the goals you have set for the future, both in terms of growth and in terms of investment products?
Sascha Wullschleger: «BIL has been active on the Ticino financial center for 30 years, including various acquisitions and mergers. Our team currently has 10 people. Our will is to be increasingly present in the Ticino area and become the reference partner trying to offer more and more niche products and services as a Boutique Private Banking bank ».
