Moonfare: Private market fintech gains a foothold in Zurich

11 April 2022
Publication · Reading time: 4 minutes

This article was first published in German at Finews.ch.

The German startup brings private market investments to the platform. The Swiss market has been the focus from the beginning – Moonfare now announces to finews.ch a rapid expansion in this country.

From the Spree to the Limmat – Moonfare plans to open an office in Zurich before the end of the second quarter of this year. “We are currently in the process of expanding the team,” reports company CEO and founder Steffen Pauls on his plans for the Swiss branch.

From there, things are expected to move rapidly; the startup, which offers access to selected private market funds via a digital platform, announced a kickoff on Monday. Accordingly, the Berliners are teaming up with asset manager Geneva Management Group (GMG); the Geneva-based asset manager, founded at the turn of the millennium, will subsequently make Moonfare’s platform solution available to its clients.

After the agreement with the private bank Bordier, this is the second official partnership of the fintech in this country.

Fidelity on board

Much more is to follow. “By the end of the year, we hope to announce ten more private banks, independent asset managers and family offices as partners,” CEO Pauls says confidently. The Swiss financial center has been a focus market from the beginning, he continues. According to Pauls, around $250 million of Moonfare’s $1.8 billion in entrusted assets already originate from Switzerland.

Founded in 2015, the fledgling firm is currently expanding globally. At the beginning of the year, Moonfare launched in the world’s largest wealth management market, the United States; in addition to Berlin, the startup has offices in London, Luxembourg, Hong Kong, London and, most recently, New York for its total of around 140 employees. Moreover, the Germans can count on powerful allies: Last November, Moonfare raised a further $125 million from investors, including US financial investor Insight Partners and fund house Fidelity International.

Limit still at 125,000 francs

That’s helpful. “The rapid growth in Switzerland has also come about thanks to asset manager Fidelity, which also supports us here as a European distribution partner,” Steffen reported.

In Switzerland, the Berliners are taking a two-pronged approach. On the one hand, they are addressing domestic asset managers such as GMG, to whom the Moonfare platform is offered as a white-label product. In addition, there is also direct business with private investors. Currently, this is only possible in Switzerland with qualified investors above a limit of 125,000 Swiss francs. But the “democratization” of private market investments that Moonfare has in mind is to be pushed further. “While respecting regulatory requirements, we are working on solutions to lower the entry threshold for private investors,” Pauls announces.

Automatic verification

What sets Moonfare’s approach apart from other offerings in his eyes is, on the one hand, automation: “Investors are able to sign up on the platform within fifteen minutes.” Client verification (KYC) and onboarding happen automatically. This is still rare in the private market sector, the CEO cautions. The platform presents a narrow selection of several dozen private market funds from a wide range of sectors – such as private equity, infrastructure, venture capital and the secondary market.

It is also possible to trade via Moonfare. After a one-year holding period, customers have the opportunity to sell their fund units. This significantly increases liquidity for investors, Pauls points out.

The Geneva partner GMG knows one this to estimate. The fund house serves both institutional and UHNW clients. By joining the Moonfare platform, the company now hopes to expand the investment universe for this clientele and overcome existing barriers to private market investments.

Reluctant banks

Moonfare’s automated solution massively facilitates access to private market funds, says GMG President Dave Elzas in an interview. As a result, he says, clients who have this positive experience will press their relationship banks to access such offerings more quickly in the future.

“To date, clients often experience custodians resisting the outflow of assets under management into third-party funds, which include funds from the private market segment,” Elzas says of his experience.

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