A new tech fund backed by Jeff Bezos courts individual investors

Hedge fund giant Coatue Management is launching a fund that invests in high-growth public and private tech companies, and requires a minimum investment of $50,000. The family offices of Amazon founder Jeff Bezos and PC company founder Michael Dell have committed a total of $1 billion to seed the new fund, according to Coatue.

“It’s such an obvious idea that if I don’t do it, someone else will," Philippe Laffont, Coatue’s founder, said in an interview. He said he personally pitched Bezos and Dell, including one over dessert at lunch (Laffont didn’t divulge which of the two).

The new fund will invest around 20% to 50% of its assets in private investments, and the rest in public stocks, according to a pitch deck seen by The Wall Street Journal.

Philippe Laffont, founder of Coatue Management

Access to private tech companies and other nonpublicly listed investments has historically been reserved for the super rich and institutional investors, such as endowments and sovereign-wealth funds. But big asset managers including BlackRock and KKR have been seeking to expand by tapping into the vast pool of individual investors’ wealth.

Coatue, founded in 1999, is a powerhouse in tech venture and growth investing with a private portfolio that includes Open.AI and Elon Musk’s SpaceX and xAI.

For its other funds, Coatue typically requires a minimum investment of $5 million.

The New York-based firm managed $54 billion in assets as of December, according to the pitch deck. That included around $22.3 billion invested in public stocks and $22.9 billion marked for early-stage and growth venture investments.

Coatue’s new fund could be a lucrative new revenue stream. It will charge an annual management fee of 1.25% plus 12.5% of the fund’s annual profits, providing the profits exceed 5%.

Redemptions won’t be as easy as with publicly listed funds. Investors will be able to sell their shares once a quarter, with Coatue capping total redemptions at 5% of the fund. Those who sell in the first year will incur a 2% penalty.

The fund will launch with Swiss banking giant UBS, and be made available to wealth management clients through advisers as soon as this week, according to people familiar with the matter.

Not everyone at Coatue wanted to target individual investors, but Laffont said opening up tech investments “makes the job a little bit less boring."