(Bloomberg) — Morgan Stanley is launching a private equity fund for its widest audience yet — investors wielding a few million dollars — as asset managers help broader masses into the once-exclusive realm.
The North Haven Private Assets Fund will offer exposure to co-investments and secondaries in the lower middle market, according to a statement Wednesday. The firm’s $1.6 trillion investment-management arm hasn’t set a fundraising target but it could gather “a few billion dollars in the near to medium term,” Neha Champaneria Markle, head of private equity solutions, said in an interview.
Private equity firms once catered almost exclusively to institutions and ultra-wealthy clients able to analyze the risks — and stomach the potential losses — from putting money into investments spanning several years, potentially through shifts in the economy. That exclusivity frustrated throngs of smaller investors eager to hunt returns beyond public markets.
“We’ve had a front-row seat to the opportunity, appetite and demand for private equity in a format that is more user-friendly for individual investors,” Markle said. “There’s enough of an understanding about how private equity works, how these types of vehicles work, for us to be comfortable launching our strategy.”
The fund will be evergreen, meaning clients can periodically withdraw or contribute more capital. It will initially be available only to Morgan Stanley clients, with plans to open it more broadly at a later date, Markle said.
Alternative and traditional asset managers are rushing to develop more offerings for that wider audience. Last month, BlackRock Inc. Chief Executive Officer Larry Fink pledged in an annual investor letter to open up private markets to millions of everyday investors so they can share in more of the gains from economic growth.
Read More: Larry Fink Vows to Unlock Private Investments for the Masses
Morgan Stanley’s investment-management unit is one of its three main business lines, alongside wealth management and institutional securities. The firm almost doubled assets under management in 2021 when it closed its purchase of Eaton Vance.