Direct-to-LP Bypasses Feeder Funds
Managing Director at iCapital on the AML/KYC chokepoint in private markets
This points to the main way Europe can bypass the feeder fund bottleneck, by selling a fund that can admit many end investors directly instead of aggregating them through a conduit vehicle. In practice, Moonfare built a consumer style private markets platform in Germany and sells access to curated private equity products online, while CAIS built a US advisor platform that emphasizes direct access for independent RIAs. That leaves iCapital strongest where feeder funds, wirehouse workflows, and heavy post trade administration still matter most.
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Moonfare is a Europe based marketplace for individual investors, founded in Berlin in 2016, built around online access to curated private equity funds. More recently it has pushed ELTIF structures with minimums as low as EUR 10,000, which are designed to let eligible investors buy into a regulated vehicle directly rather than through a separate feeder.
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CAIS is the closest US analog on the direct access side. Its Schwab marketplace materials describe strategies that advisors can access directly while avoiding feeder structures, and its business is concentrated in the independent advisor channel rather than the big wirehouses that drove most of iCapital's historical volume.
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The tradeoff is economics and control. When a fund goes direct, the platform still earns software or placement revenue from onboarding, suitability, subscriptions, and reporting, but it loses the richer fee pool that comes from acting as GP of a feeder. That is why direct models reduce operational friction for GPs and advisors, but also shrink part of iCapital's highest value role.
The market is moving toward more products that look investable out of the box for wealth channels, especially registered and semi liquid vehicles in the US and ELTIF style vehicles in Europe. That favors platforms that can own the digital workflow without owning the fund wrapper every time, and it pushes iCapital to win on distribution software, reporting, and integrations as feeder demand becomes more selective.