Banks charged sharply different fees for access to Anthropic investment
Disparate pricing raises prospect of investors earning unequal returns in the same deal on the basis of who their banker is
When Morgan Stanley offered wealthy clients a chance to invest in Anthropic’s $30bn private fundraising in February, it said it would charge a 1 per cent fee for access to the deal.
But Goldman Sachs sought to impose a much pricier, multi-layered fee structure for its clients involving a management fee and a share of profits, according to people familiar with the terms of their proposals.
The disparate pricing reflects an emerging inconsistency in how Wall Street banks charge clients for access to in-demand private market investments, raising the prospect of investors earning unequal returns in the same deal on the basis of who their banker is.
Alongside other big institutions, Goldman Sachs and Morgan Stanley each had allocations to Anthropic’s $30bn deal in February. Claude-maker Anthropic raised money from investors including Singapore’s sovereign wealth fund, Coatue and Nvidia, in a deal that gave the AI business a $350bn valuation as it prepared to launch one of the biggest initial public offerings on record. Anthropic declined to comment.
The enthusiasm for Anthropic’s capital raise shows continuing appetite among wealthy private investors for stakes in unlisted companies despite recent tremors in private credit and wider enthusiasm about the world’s biggest AI businesses ahead of their hotly anticipated IPOs. Like Anthropic, OpenAI is similarly expected to pursue a major stock market listing as soon as this year.
Both companies have moved to broaden their investor base ahead of those listings, adding mutual funds and retail investors to strategic partners such as chipmaker Nvidia and cloud partners Microsoft, Amazon and Google, as well as venture capitalists.
Retail investors are expected to play an important role in the IPOs which, along with an imminent listing for SpaceX, are set to be among the largest of all time. OpenAI raised $3bn from retail investors as part of its record $122bn funding round last month.
Goldman Sachs pitched the capital raise to private wealth clients via a special purpose vehicle, known as a single investment fund, according to people familiar with the details.
It did not propose a placement fee, but instead presented a management fee of 1.25 per cent and carried interest of 17.5 per cent of profits if returns reached at least 8 per cent.
Morgan Stanley also offered wealthy clients access to the Anthropic funding round via a special purpose vehicle, but presented a placement fee of 1 per cent and no management fee or carried interest.
Unlike Goldman, which co-invested alongside its clients, Morgan Stanley did not act as a fiduciary, meaning it offered the investment to clients without making a recommendation for the deal, according to people familiar with the matter.
The management fee charged by Goldman is unusual for a single-company investment vehicle. Typically in such deals, banks charge a small placement fee and a nominal ongoing maintenance fee.
One investor, who has previously invested in single-company SPVs, said it could be difficult to know the difference in returns until the end of the vehicle’s life. He noted that there was often closer alignment with a wealth adviser when they invested alongside their clients in a transaction, but that the incentive fee the adviser earned could ultimately make the returns lower compared with a one-time placement fee.
A spokesperson for Goldman Sachs said: “For single asset opportunities, we usually act as fiduciaries, investing alongside our wealth clients. Our clients gain access to the same deep due diligence and high-conviction investments as our institutional funds, utilising a consistent, traditional fee structure.”
Goldman’s wealth business targets the ultra-wealthy. The bank’s average client account is roughly $70mn, whereas clients at Morgan Stanley, which has a much larger wealth management business than Goldman, typically have $20mn or more in assets.
A Morgan Stanley Wealth Management spokesperson said: “When offering private markets access to wealth clients our scale enables us to frequently offer access without management or carry fees, similar to what institutions receive.”