As you can imagine, brokerages typically charge fees for prime shelf space, and things can get expensive. The biggest private equity firms have traditionally relied on wealth management behemoths like Morgan Stanley or UBS (or big independent broker-dealers) to route their offerings to financial advisors who cater to the HNW crowd. It is interesting how technology platforms are removing some of the intermediaries typically required to access private markets. The markets might be shaky and warnings of a downturn might be flooding FinTwit, but the wealthy are still writing checks. Approximately 2,500 global investors had put in around $1.8 billion at the end of April. Moonfare, which has already been operating in Europe, opened its doors in the U.S. Somewhat similar to AngelList, where individuals can invest in a startup via special purpose vehicle, venture-backed Moonfare uses feeder funds for accredited investors to invest in funds at firms like Apax Partners, Carlyle Partners, or General Atlantic-as the average millionaire isn’t going to pick up the phone, call up Apollo Global Management, and become an LP in Fund X. Pauls left KKR in 2015 and opened a tech company called Moonfare. Since then, firms have been trying to wrangle their way into the multi-trillion-dollar market. Buyout firms weren’t allowed to market directly to these investors until 2013 under SEC rules. The JOBS Act was passed by Congress in 2012 and paved the way to smaller, non-institutional investors joining the fray. It might seem obvious to look to wealthy people for funding, but a decade ago, it wasn’t. “It’s probably one of the biggest top three strategic themes in the industry,” Steffen Pauls, a former KKR managing director who led the company’s operations in Germany until 2015, tells me. Earlier this year, Blackstone said it had raised a whopping $50 billion of equity capital from that group in 2021. In 2018, a Blackstone Group executive famously predicted that retail investors would make up some 50% of the firm’s assets under management in five to 10 years.
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