Liechtenstein royal family-backed banking and asset management firm LGT says private equity has ‘good future’ in China

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The most interesting investment opportunities in China are in sectors that will see growth triggered by climate change, such as energy and electric mobility, Prince Max says

Group will continue to invest with leading Chinese private-equity firms and incorporate its views on sustainability and ESG into investment decisions

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Prince Maximilian, the chairman and CEO of LGT Group, during the Milken Institute Global Investors’ Symposium in Hong Kong last week. Photo: Bloomberg

Aileen Chuang

Published: 3:00pm, 1 Apr 2024

LGT Group, the world’s largest royal family-owned private banking and asset management group, sees private equity continuing to be attractive to high-net-worth clients, especially in China, where the public market has tumbled.

While the value of private-equity deals in China dropped 58 per cent last year compared with the previous five-year average, an economic slowdown and stock market woes, the private-equity market’s overall returns have outperformed public markets such as bonds and equities, according to the group’s chairman and CEO, Prince Maximilian of Liechtenstein.

“We continue to be optimistic that the private-equity industry will have a good future,” Prince Max said on the sidelines of the One Earth Summit in Hong Kong last week. “In China, it’s strongly established. While the current environment is a little bit more difficult, private equity has always done well.”

He said the private-equity market has most likely reached the bottom and might recover over the next two to three years.

LGT is owned by the House of Liechtenstein, the royal family that has rules the country located between Austria and Switzerland. The group’s assets under management increased to more than US$350 billion last year from US$57 billion in 2006, when the prince took over as CEO.

“We have, over the years, pushed on the private banking side the importance of the private-equity industry,” the prince said. “If you look at the penetration of private equity with private clients, it continues to be globally at the very low level of 2 per cent to 3 per cent of total allocations, while some of the most advanced institutional investors have allocated up to 40 per cent to private equity.”