Fintech platforms offer funds for individual investors to access unicorns in private equity, real estate markets
- Fintech platforms ease access to unicorns and real estate deals that are typical domain of wealth funds, pension funds
- Private market fund managers raised almost US$98 billion in Asia last year, a third straight year of decline, according to a McKinsey report
Several start-ups in Asia are using fintech to help individual investors get a piece of the action in the US$98 billion market for alternative assets, access that typically requires an outlay equivalent to the value of a sea-view luxury villa in Hong Kong.
One such example is German start-up Moonfare, which has 13,000 users on its digital platform that aggregates small individual tickets into a feeder fund, which in turn invests in private equity or credit vehicles. Hong Kong-based Altive is also distributing a new fund for professional investors to get into the same sphere.
“Investing via a fund offers diversified exposure to various early-stage companies,” said Kenneth Chan, partnerships manager for Asia-Pacific at Moonfare, which plans to launch up to 20 funds annually. “Family offices in Asia have shown an increasingly strong appetite for investing directly in early stage companies.”
The private market is traditionally a domain of pension funds and other institutional investors, and funds managed by the likes of KKR and Carlyle are often off-limits to high net worth individuals. Platforms managed by Moonfare and Altive could level the playing field and ease access for professional investors, or those with at least HK$8 million (US$1.03 million) of wealth under local market definition.
This means some of the world’s biggest unicorns, such as ByteDance, the owner of TikTok, are now open to such investors. These fintech platforms have lowered the minimum outlay to US$100,000, with potential savings in upfront fee compared to those charged by private banks.
Fidelity International took a minority stake in Moonfare in March as the fund manager overseeing US$700 billion of assets expanded into private markets. A distribution partnership will also give family offices, their advisers and banks access to funds through Moonfare’s digital platform.