What’s going on here?
Mediobanca’s private banking arm unveiled a new illiquid open-ended alternative fund managed by KKR, aiming to attract wealthy clients.
What does this mean?
Mediobanca launched its Mediobanca Premier back in April as part of a long-term strategy to grow its wealth management division through 2026. Italian households sit on €5.3 billion ($5.8 billion) in financial wealth, with a notable 60% remaining unmanaged. In 2022, financial wealth in Italy dropped by 14% after adjusting for
inflation
, but there was a rebound in 2023 with a 5.3% wealth increase among top-tier households. Mediobanca’s ultra-rich clients can now buy into K-PRIME Feeder, a sub-fund run by KKR’s private equity team. By the end of March, KKR boasted $183 billion in
assets
under management (AUM) specifically in private equity, contributing to a total AUM of $578 billion.
Why should I care?
For markets: The allure of alternatives.
Mainstream asset managers are increasingly eyeing the alternative investment sector. Europe’s biggest fund manager, Amundi, made waves in February by agreeing to acquire Zurich-based Alpha Associates, which offers private debt, infrastructure, and private equity strategies to institutional investors. With K-PRIME Feeder, Mediobanca Premier clients access the same investment opportunities as KKR’s institutional funds, with the added benefit of monthly subscriptions and regular redemption opportunities – a rare liquidity feature in the world of private equity.
The bigger picture: Evolving wealth management.
Mediobanca’s latest move reflects a broader trend. The financial landscape is shifting as wealth managers pivot towards alternative assets to attract high-net-worth individuals. With a significant portion of Italian wealth remaining unmanaged, providing exclusive investment vehicles like K-PRIME can tap into substantial untapped potential. This partnership with KKR not only enhances Mediobanca’s portfolio but also aligns with a growing demand for more diversified and nimble investment options globally.
