If you invest 25’000 Swiss Francs at a yearly return of 10% and you do not reinvest the returns over 10 years, you would have earned 25’000 Swiss Francs. If you reinvest your yearly returns, you would have made 39’844 Swiss Francs, and thus 14’844 Swiss Francs more. This is because the annually reinvested amount earns additional money. This effect is called compound interest.
Statistically people get older.
Today’s average life expectancy in Switzerland is 84. 20 years ago, the average life expectancy was 80. This trend will continue.
(The World Bank, 2018)
Mandatory pension schemes
The performance of mandatory pension schemes is driven by two factors. The first factor is the ratio between active workers and retirees. As our population ages, the number of active workers, who cover retirees’ pensions decreases. The second factor are the returns, that pension funds realize with your paid-in capital. These returns have been deteriorating over the last years. Thus, mandatory pension schemes are deteriorating.
Compared to working full-time, if you work from the age of 20 to 65 years, earning the average Swiss salary of CHF 6’500 per month, you would have earned CHF 1m less (working 80% part-time) or CHF 3m less (working 40% part-time) at the time of your retirement.
Assets under management (AUM)
Assets under management (AUM) is the total market value of the investments that a person or financial institution manages on behalf of its clients.
Closed-ended and open-ended Private Equity fund
One distinguishes between closed-ended and open-ended Private Equity funds. Closed-ended funds have a limited lifetime and a predefined size. Open-ended funds have a undefined lifetime and size.
International securities identification number (ISIN)
The ISIN is globally used for the identification of specific securities (like funds, shares and bonds). ISINs are designated to securities to enable settlement and clearing procedures. An ISIN consists of a twelve-digit letter-number combination.
Investment ticket describes the accumulated amount of money from investors that is invested into a Private Equity fund.
Key performance indicator (KPI)
A key performance indicator (KPI) measures the progress with respect to critical success factors of an investment (portfolio).
Multiple of money (MoM)
The multiple of money (MoM) is a Private Equity fund performance measure that shows how many times an investor’s initial investment has multiplied.
Net asset value (NAV)
Net asset value (NAV) represents the net value of an entity and is calculated as the total value of the entity’s assets minus the total value of its liabilities.
Private Equity ownership
The ownership of a company by a Private Equity fund is characterized by the entrepreneurial Private Equity fund, which acts with one voice on behalf of all its investors.
The Swiss criteria for a qualified investor are:
Bankable assets of at least CHF 500’000 AND the necessary knowledge to understand the risks associated with the investments based on the investor’s training, education and professional experience or on the basis of comparable experience in the financial sector.
Bankable assets of at least CHF 2 million.
For both requirements, only the liquid assets can be taken into account, in particular bank balances, securities, derivatives, precious metals, life insurances and surrender claims from fiduciary relationships, but not real estate investments and social security claims or benefits from occupational pension schemes.
A securities account is a certain kind of account for the safe-keeping of securities on behalf of an investor by a bank.
Special purpose vehicle (SPV)
Depending on the Private Equity fund investment opportunity, you either invest directly in the Private Equity fund or you invest in a Private Equity fund via a special purpose vehicle (SPV).
The SPV, is a legal entity and has the sole purpose of executing the investments into the Private Equity fund. Thus, the individually invested money is tied up to an SPV over a period of ~10 years and cannot be accessed.
For each Private Equity fund investment opportunity, iAccess Partners transparently outlines if the investment is done directly in a Private Equity fund or via a SPV.
The sum of cumulative, individual investments in a specific PE fund, as specified by iAP, at which the investment opportunity takes place.
The total value is calculated as the sum of the total distributions plus the current net asset value (NAV) of the underlying Private Equity fund.
The aim of a Private Equity fund is to increase the value of its own companies. This can be done by increasing the company’s profits and making the business model more robust.
White label solution
iAccess Partners provides a white label solution to financial institutions, so they can bring top-performing Private Equity funds to their clients starting with a minimum investment amount of 25’000 Swiss Francs. This white label solution is catered to the needs of financial institutions.
If you are interested in iAccess Partners› white label solution, please do not hesitate to contact us at firstname.lastname@example.org