Investing in Vega to democratize private wealth management in Europe
Within the wealth segment of high-net-worth individuals (HNWI) — those with investable assets over $1 million — Capgemini defines three tiers: millionaires next door ($1 million–$5 million), mid-tier millionaires ($5 million–$30 million) and ultra-high-net-worth individuals (UHNWI) ($30 million+).
While UHNWI and their family offices have long received high-touch/white-glove services from private wealth managers and private banks, due to the high cost of those services they have traditionally not been extended to the lower HNWI tiers. Thus, despite currently holding almost $55 trillion in wealth — roughly double the wealth held by UHNWIs — lower-tier HNWIs are being underserved in terms of the financial products they have access to. Often lumped together with the mass affluent segment ($100,000–$1 million in liquid assets), these lower-tier millionaires tend to be offered stock- and bond-based investment products and related margin loans because the retail wealth managers who service them lack access to more sophisticated products. While the more enterprising members of this group may cobble together access to certain alternative investment products on their own or through platforms like iCapital (a Citi Ventures portfolio company), this “hack” does not quite match what the wealthier segments are able to obtain.
Enter Vega, a London-based wealth technology (wealthtech) startup offering Europe’s first holistic, end-to-end private wealth management platform targeted towards the lower-tier millionaires segment. With a mission to “bridge the sophistication gap between institutional and private wealth,” Vega joins the disruptive global trend of wealthtech solutions seeking to broaden access to the wealth management products once only available to institutional investors or UHNWI.
Vega uses a three-layer approach to create a sophisticated solution on par with UHNW standards:
- Investments: Vega users can select diversified portfolios covering all institutional asset classes, both public (equities, fixed income, commodities, etc.) and private (private equity, venture capital, private credit and real assets). The firm also offers clients easy access to high-yield cash management options to take advantage of the current high interest rate environment.
- Leverage and liquidity solutions: Vega seeks to enable users to borrow funds against their investments in illiquid asset classes and optimize the management of complex financial assets, many of which require multiyear capital calls. The firm is also building a secondary marketplace for clients to sell their alternative investments stakes to other clients on the platform.
- Comprehensive financial and estate planning: This layer integrates investing with other wealth-building tools, with initial products focused on portfolio analytics and tax-efficient entities setup.
While each layer works as a standalone product, Vega users can combine all three to gain a complete view of their wealth and unlock the platform’s full potential.
In addition to its robust product offerings and roadmap, we’re impressed by Vega’s innovative partnership-based go-to-market (GTM) strategy and early traction. Just emerging from stealth mode, Vega is building a foundational user base through an invite-only program focused on financially savvy, high-income UK-based clients who are too early in their wealth-building journeys to be adequately served by private wealth managers. Simultaneously, and as opposed to trying to displace traditional advisors with a pure direct-to-consumer model, Vega is offering its technology as a white-label platform to financial intermediaries (i.e., multi-family offices, independent financial advisors and wealth managers) across Europe and the UK who lack access to sophisticated financial products and want to equip themselves with the digital tools to service the new generation of HNWIs.
The clarity of vision behind Vega’s product roadmap and GTM strategy naturally extends from the passion, expertise and experience of its leadership. Personally frustrated by the limitations of private wealth solutions, founder and CEO Alexis Augier — then a hedge fund investor at Elliott who had previously worked at KKR and Goldman Sachs — assembled a star team of financial services and product and engineering experts from companies such as Revolut and Trade Republic to build Vega. The fact that each member of the team left lucrative positions at prestigious firms to join Vega speaks not only to Alexis’ leadership but also to the strength of feeling behind its mission to democratize institutional-level private wealth management services.
Given the size of its opportunity, the strength of its mission, its differentiated GTM strategy and its passionate team, Citi Ventures is delighted to invest in Vega’s seed funding round. We join Motive Ventures, Picus Capital and over 60 angel investors, including senior partners from leading investment firms and fintech executives with leadership experience at companies such as N26, Trade Republic and Klarna. Our congratulations to Alexis and the entire Vega team — we look forward to being part of your journey from here.