German fintech startup Moonfare, which runs an online platform for individual investors to bet their money on a curated portfolio of private markets funds, is planning to open an office in Singapore to ramp up its Asia operations.
The firm forayed into Hong Kong early last year. It is now looking to launch its second office in Asia with the establishment in the city-state as early as the end of the third quarter, its managing director Frederik Meheus told DealStreetAsia.
Moonfare, headquartered in Berlin, received a licence from the Hong Kong Securities and Futures Commission (SFC) last January to deal in securities for its local business activities.
It has so far helped over 1,600 clients invest more than 900 million euros (approximately $1.1 billion) into funds managed by investment powerhouses like KKR & Co and Warburg Pincus.
The proportion of Asian clients on the Moonfare platform is currently sub-10%, said Meheus. He expects it to “soon grow beyond” that level as the Asia team is witnessing “the same scaling-up speed that it had in Europe,” he added.
Moonfare is in the process of applying for the Capital Markets Services (CMS) Licence from the local central bank and financial regulatory authority, the Monetary Authority of Singapore (MAS). The licence will enable the startup to conduct regulated activities, including dealing in capital market products, fund management, and corporate finance, among others, in Singapore.
Founded in 2016, Moonfare operates like a limited partner (LP) to collect orders from qualified individual investors registered on its platform, and to collectively invest in funds on their behalf. This approach effectively brings down the minimum ticket size of such funds to as low as 50,000 euros ($60,544.8) — well below the hundreds of millions of US dollars that large institutions usually place.
To date, Moonfare has offered over 30 private markets funds with a focus on private equity (PE) buyouts, venture capital (VC), funds of secondaries, distressed debt, and real estate categories like infrastructure. The startup will soon introduce its first private credit fund.
“In general, there’s higher risk appetite in Asia,” said Meheus. “This [PE] is such an underpenetrated asset class… The inflows that will happen in this asset class are just going to be phenomenal. That is the biggest tailwind.”
He referred to the virus-induced slump in the stock market in early 2020 as “a perfect storm” to have invoked investors’ demand in extending their portfolios into private markets investments. Sectors like technology, health sciences, and ESG investments around green infrastructure-related portfolios are “clearly in demand,” he said.
To further explore opportunities in Asia, Moonfare is also in conversations to potentially set up local presence across markets such as Australia, Japan, South Korea, Taiwan, Indonesia, Malaysia, and India. In Europe, it runs offices across Germany, Luxembourg, and the UK.
In March, US asset management giant Fidelity International picked up a minority stake in Moonfare to become the firm’s first institutional investor. Prior to that, the startup raised 25 million euros in April 2019 from investors including ProSiebenSat.1 Media SE’s former CEO Thomas Ebeling, former KKR partner Henrik Kraft, and ex-BC Partners Chairman Jens Reidel.