In an environment where diversification has become essential, it opens access to another segment of the economy: that of companies growing outside the stock markets.
Private equity is no longer an asset viewed as a side issue. It is gradually taking its place in our clients’ long-term wealth management strategies. The question is why, how, and to what extent to incorporate it into an asset allocation, as its potential comes with very specific characteristics.
Private equity requires a long-term horizon, limited liquidity, and exit conditions that can sometimes be restrictive. An investment can thus span seven to ten years.
Luxembourg: Where Two Areas of Expertise Converge
This is precisely where Luxembourg has a unique advantage to offer. The financial center brings together two powerful ecosystems: that of funds and alternative finance, and that of international life insurance. Luxembourg unit-linked policies can be distributed in many European countries under the freedom to provide services and, under certain conditions, can hold private assets.
This convergence makes it possible to combine traditional assets and unlisted investments within a single wealth management vehicle—namely, Luxembourg life insurance.
“Luxembourg has this rather unique ability to foster dialogue among different sectors of the financial industry. For our international clients, our added value lies precisely in our ability to combine investment flexibility, expertise, and a rigorous regulatory framework. This Luxembourg expertise is now taking on a new dimension. With the creation of the Helvetia Baloise Group, we are now part of one of Europe’s leading insurance groups. This new scale opens new opportunities: a presence in multiple markets, the sharing of expertise, the pooling of know-how, and the ability to develop new solutions.”
The Expertise Behind the Investment
Combining life insurance with private equity is not necessarily straightforward, however: a life insurance policy can be terminated at any time—particularly in the event of a full surrender or death—whereas an unlisted asset cannot be sold overnight.
Upfront screening is therefore essential: asset eligibility, risk of conflicts of interest, available liquidity within the policy, exit terms, and more. At Baloise Luxembourg, this analysis continues throughout the holding period, with ongoing monitoring of capital calls, distributions, valuations, and regulatory changes.
This expertise has grown considerably. More than twelve specialists are now involved in the onboarding and monitoring of private assets, with a dedicated team and coordination among Private Assets, Sales, Legal & Wealth Planning, AML, and Back Office.
Making a complex asset class accessible certainly does not mean trivializing it. Our role as an insurer is also to establish a framework, analyze risks, and ensure that the investment truly aligns with the client’s profile and investment horizon.
Investing Differently, with Discernment
Private equity is therefore not intended to replace traditional assets. It offers an additional opportunity for diversification to investors who have the appropriate profile, investment horizon, and ability to tie up a portion of their wealth.
Technology is expected to further drive growth in this promising segment: automated trading, improved information flow, and artificial intelligence can facilitate due diligence and investment monitoring.
For Laurent Heiles, the issue ultimately boils down to something quite simple: “Private equity is a long-term game. And that is precisely one of the strengths of life insurance: it allows you to build a wealth management strategy that looks beyond just a few months to several years, or even several generations.”