BT launches first-ever private markets SMA

BT has unveiled its first managed account on its Panorama platform dedicated to private markets, boasting it says a “semi-liquid” structure for investors.

Geared at high-net-worth (HNW) investors but at a relatively accessible entry point, the Drummond Private Markets Separately Managed Account (SMA) promises high-net-worth (HNW) clients “easier access to a mix of private equity, private debt and real assets”.

The SMA was developed by Drummond Capital Partners, a boutique multi-asset investment firm, in partnership with Ironbark Asset Management.

Private market investments are traditionally the preserve of ultra-HNW investors, with private equity or venture capital funds typically setting their minimum investment thresholds in the $5 million to $10 million range.

The minimum investment in the Drummond SMA is $100,000, making it accessible to individuals classified as ‘sophisticated investors’ (defined as having minimum net assets of $2.5 million or a minimum income of $250,000 per year for the past two years).

Zac Leman, BT’s head of managed accounts, noted that interest was strong among HNW clients in gaining exposure to private markets, adding diversity to portfolios that are predominantly invested in traditional asset classes.

“Drummond’s new product caters to that client demand, while also giving advisers the benefits that come from utilising a managed account structure.”

According to BT, investors also benefit from the product’s managed account structure, offering investors “professional management, diversification and transparency of underlying investments across private markets asset classes”.

A key drawcard of the SMA is its relatively high frequency of redemptions, which are mostly offered on a monthly basis, but also have some daily or quarterly.

“In comparison, some private markets funds typically require a long-term commitment, with investors’ funds ‘locked up’ or inaccessible for around 10 years,” BT wrote.

Drummond Capital Partners managing partner Tom Schubert said the SMA “addresses many of the hurdles that advisers and clients tend to face when investing in the private market sector – accessibility, liquidity, complexity and transparency”.

“We’re proud to have developed an innovative, differentiated solution that has been the culmination of our investment team’s experience in the managed account sector and strong heritage in the high-net-worth and family office segment.”

According to Schubert, Drummond was convinced to launch the fund on Panorama due to both its diversity of investors – “which includes a sizeable high-net-worth segment” – as well as BT’s managed account capabilities.

Investor interest in private markets has grown significantly in recent years, with BT noting that nearly one in five HNW Australian investors now hold alternative assets, of which private markets are a part.

BT notes that its managed accounts offering has grown to more than 400 products on the Panorama platform, with funds under administration increasing by 31% to $16 billion in the 12 months to 30 April 2024.