Raisin, a leading fintech in the savings and investments space, manages over 1.5 billion EUR in ETFs as part of its robo-advisory proposition launched in 2018. Together with Moonfare, the globally leading DTC digital private equity investment platform, Raisin is now expanding its product portfolio to include its first alternative asset class. Private customers can invest via Raisin’s German platform, WeltSparen, in a portfolio of top-tier private equity funds of the kind that are traditionally only accessible for institutional investors. This is an important step in Raisin’s path to becoming a “one-stop shop” for investment solutions, from deposit brokerage, to liquid and illiquid investment products, and pension products with tax benefits.
Berlin-based fintechs cooperate for one-stop investment solution
The new private equity offering in cooperation with Moonfare is fully integrated into Raisin’s WeltSparen platform. This is the first time Raisin has added an alternative asset class to its suite of investment solutions, thus far based primarily on ETFs. Raisin customers can easily invest in top Private Equity funds with their existing customer account – fully digitally and without re-identification.
“Private equity investments are important assets that can help strengthen financial portfolios, with studies showing that they can yield long-term returns that are three to five percent higher than those of the global stock market. However, most private customers are unable to take advantage of this asset class due to high entry barriers,” explains Kim Felix Fomm, Chief Investment Officer at Raisin. “More and more successful companies are being taken off the stock market by private equity funds, meaning that private customers looking to tap into their growth can only do so through private equity.”
Dr Steffen Pauls, founder and CEO of Moonfare, adds: “In the past, private equity funds have consistently achieved significantly higher returns than investments in listed companies. However, until now, retail investors have struggled to gain access to high-quality private equity funds, while institutional investors have been benefiting from this asset class for a long time. Moonfare makes it possible for private investors to invest easily and directly in top-tier private equity funds and benefit from potentially high returns. With the digital Moonfare platform, low minimum entry tickets, a fully digital investment process and Moonfare’s digital secondary market, Moonfare has removed barriers to enter the asset class, such as high minimum commitments and the lack of a path to liquidity.”
Private equity at Raisin: broadly diversified entrepreneurial investments
Private equity investments are not traded on the stock exchange. Private equity funds, and in particular buyout funds, have emerged as the most attractive way to access such investments. However, investments are generally only possible with several million euros and are therefore mainly reserved for institutional investors. Raisin’s new private equity offering is aimed at semi-professional investors as defined by the German Capital Investment Code with a minimum investment amount of 200,000 EUR. The management fee for the service is 0.80 per cent p.a. on the commitment amount.
How private equity works: returns through active value enhancement
The investors’ commitments flow into a transparent basket of funds that provides exposure to companies from different regions and sectors through several targeted private equity funds. These funds take over established companies and become active themselves in an operational and advisory capacity. They use the long-standing sector expertise of their managers to leverage growth potential in their portfolio companies. For example, private equity managers will often support portfolio companies in regional or international expansion, and increase process efficiencies or develop new products and services. These measures aim to increase the value of the companies over a time period of commonly five to six years. After that, the portfolio company is sold and the invested capital, including any increases in value, is distributed to investors. Private equity funds are long-term investments: profit distributions usually start after five to six years and end after twelve years.
Responsible investing: Sustainability in the investment process
Raisin and Moonfare support the inclusion of sustainability criteria in the investment process. Both companies are signatories to the UN Principles for Responsible Investment (UNPRI), a UN-backed international investor network that promotes a more sustainable financial system.
Raisin is a pioneer of Open Banking for savings and investment products. The FinTech company provides an open banking infrastructure for the $50+ trillion global deposit market, benefiting banks and savers alike: Savers get greater product choice and freedom of choice, financial services providers get best-in-class marketplace solutions for their own customers, and banks get better access to deposit funding. Raisin operates its own B2C marketplaces – in Europe under the brands Raisin, WeltSparen, Savedo and ZINSPILOT and in the USA under the SaveBetter brand. In Germany, the company offers ETF-based investment and retirement products in addition to savings products for private and corporate customers. Raisin works with around 400 banks and financial service providers from more than 30 countries and has over 750,000 direct customers. Raisin is backed by renowned international investors such as btov Ventures, Deutsche Bank, FinLab, Goldman Sachs, Greycroft, Headline/e.ventures, Index Ventures, Kinnevik, Orange Digital Ventures, PayPal Ventures, Thrive Capital, Top Tier Capital Partners, Ribbit Capital and Vitruvian Partners, as well as Peter Thiel. The company has offices in Berlin, Frankfurt, Hamburg, London, Madrid, Milan, Manchester, New York, Paris and Zurich.
Moonfare offers individual investors and their advisors access to top-tier private equity investment opportunities for the first time. With a digital onboarding process and asset management platform, Moonfare allows clients to register and invest in as little as 15 minutes. To date, Moonfare has offered over 45 private market funds from top fund managers worldwide with an emphasis on private equity buyouts, U.S. tech funds and real asset categories like infrastructure.
Moonfare’s investment team conducts ground-up due diligence on all funds. Fewer than 5% of available funds pass this process and make it onto the Moonfare platform. This focus on quality is one reason why Moonfare has won the trust of more than 2,200 clients who have invested more than $1.7 billion on its platform. Headquartered in Berlin, Moonfare operates in 22 countries across Europe, Asia, and America and has offices in New York, Hong Kong, London, Zurich Singapore and Luxembourg, with more to open soon.
Muhammad Iqbal & Paul Wolter
+49 151 703 476 37