London/Berlin, March 15, 2021: Fidelity International (Fidelity), a global asset manager with total client assets of $706.3 billion, and Moonfare, the leading digital investment platform for high quality private markets funds, announce an exclusive strategic distribution partnership.
Under the partnership, through its digital platform Moonfare will provide access to private market strategies for Fidelity’s institutional and wholesale clients. As such, the agreement marks a first in the asset manager’s history and serves increasing demand from investors aiming to achieve attractive returns by adding alternative investment strategies to their portfolios.
Fidelity* will also invest a minority stake in Moonfare and appoint Christian Staub, Managing Director Europe Fidelity International, to join Moonfare’s advisory committee. Fidelity is the first institutional investor to take an equity stake in Moonfare, which was founded in 2016 and named one of LinkedIn’s top 10 start-ups in Germany in 2020.
The exclusive strategic distribution partnership will start from April 2021 in major parts of Europe, starting with Germany, Switzerland, Italy, France and Austria and expand to cover further international markets at a later stage. Alongside Moonfare’s current and future clients and partners, Fidelity and Moonfare together will empower professional investors such as banks, family offices and their advisors to access private markets funds on behalf of their clients in a scalable way.
This announcement follows Fidelity’s recent move into private credit, further bolstering its fast-growing alternative assets space, where it has already begun offering real estate funds. Moonfare’s emphasis on fund selection, digital platform, low investment minimums (starting from €50,000) and disruptive fee structure made Moonfare stand out as a partner for Fidelity.
“At Fidelity, we have bold ambitions to build a broader alternatives capability in the coming years, spanning private markets, real assets and liquid alternative strategies,” says Andrew McCaffery, Global Chief Investment Officer, Fidelity International. “Our partnership with Moonfare and its market leading open-architecture platform, combined with the recent introduction of a new private credit team, provides a strong foundation for future growth plans in real assets and private markets.”
“Extreme global debt burdens and sustained negative real rates are leading to higher risk and uncertainty for long-term asset allocators,” adds Fidelity’s Mr. McCaffery. “The traditional 60/40 model has been challenged recently, and as a result, alternative investments, such as in private equity and debt, have begun to play an important role in investors’ portfolios as they look to diversify and enhance long-term returns. We believe alternatives will become a permanent and growing feature of asset allocation decisions across all investors going forward.”
“Like Fidelity International and its clients, Moonfare and our investors never stop striving towards investment excellence,” says Moonfare founder and CEO Steffen Pauls. “Since inception, we have been connecting our clients, some of the most sophisticated investors in the world, with top private markets funds. Fidelity's clients and team will fit perfectly into this group going forward."
Returns from top private equity buyout funds have delivered very attractive returns. Morgan Stanley has observed that now the majority of value is created in private markets, explaining the attractive returns of top venture capital and growth equity funds that back companies in their early stages. Private equity buyout funds focused on more mature targets have delivered some of the best returns, especially amid economic dislocations: Recession-era buyout fund vintages from managers with a value-creation team deliver superior returns to investors, according to a McKinsey & Company analysis of Preqin data.
For decades, these strategies and the attractive returns they delivered to investors in the past were only available to the select few, namely wealthy institutions and endowment, pension and sovereign wealth funds. Moonfare and Fidelity will work together to redefine access to alternative investment strategies for qualifying investors.
“Until now, private market funds have only been accessible to a limited group of investors,” says Christian Staub, Managing Director Europe, Fidelity International. “By partnering with Moonfare, our ambition is to democratize the asset class, providing access to the benefits alternative assets can offer with products carefully curated by an experienced team. This is a natural evolution of our business as we continue to deliver the best possible range of services and solutions for our clients to help them achieve their financial goals.”
The value of investments and the income from them can go down as well as up so you may get back less than you invest. Alternative investments in private placements, and private equity investments via feeder funds in particular, are speculative and involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest. Past performance is not a reliable indicator of future returns.