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Mediobanca to offer richer clients illiquid KKR alternative fund

MILAN (Reuters) - The private banking arm of Italian bank Mediobanca said it would start offering its wealthier clients a new, illiquid open-ended alternative fund set up by investment firm KKR.

The move comes after Mediobanca in April launched private bank Mediobanca Premier as it strives to grow its wealth management business under a new plan through 2026.

Mediobanca said at the time that Italian households held 5.3 billion euros ($5.8 billion) in financial wealth, of which 60% was not being managed.

While Italians' financial wealth dropped 14% in inflation-adjusted terms in 2022 from the previous year according to consultancy Bain, Mediobanca said that in 2023 top-tier households saw their wealth increase by 5.3%.

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Mediobanca Premier's ultra-rich clients will be able to buy into K-PRIME Feeder, a sub-fund run by a KKR private equity fund for private wealth investors.

At the end of March, KKR had $183 billion in assets under management (AUMs) in its private equity business, out of $578 billion in overall AUMs.

In line with a trend that has seen mainstream asset managers expand in the fast-growing alternative sector, in February France's Amundi, Europe's biggest fund manager, agreed to buy Zurich-based Alpha Associates, which offers institutional investors access to private debt, infrastructure and private equity strategies.

K-PRIME will give Mediobanca Premier clients access to the same private equity team and deals as KKR's institutional funds.

K-PRIME will allow subscriptions to be made on a monthly basis, as opposed to the four-to-five-year period over which a closed-ended fund draws on capital commitments.

K-PRIME will also allow redemptions to be made at regular intervals within given limits and when specific conditions occur, Mediobanca said.

($1 = 0.9216 euros)

(Reporting by Cristina Carlevaro, editing by Valentina Za)