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Morgan Stanley Willing To Help Its Wealthiest/Possibly Dumbest Clients Get In Now On Uber

James Gorman and the gang will get you private shares in Uber, but don't you dare ask any GD questions!

If you're a Morgan Stanley wealth management client with hip grandkids who don't drive, you might want to answer the phone!

Wealthy clients of Morgan Stanley are piling into a special fund that gives them a chance to bet on Uber, people briefed on the transaction said. The fund, called New Riders L.P., is a lesser-known contribution to the billions of dollars in capital that Uber, the private ride-sharing company, has been raising in recent months.

Thanks to James Gorman and his merry band, a bunch of really rich people are getting a sneak peek opportunity to throw big money at the last unbloodied unicorn without a ticker symbol.

But like, without the "peek" part.

Yet unlike the other investors in the current fund-raising, including the hedge fund Tiger Global Management and the mutual fund T. Rowe Price, the investors in the Morgan Stanley fund are effectively handing over their money with their eyes closed.

Okay, "eyes closed" might be a little strong. It might be more like "blind in one eye and blurry in the other."

The institutional investors are getting financial disclosures on revenue and expense metrics and projections, a person briefed on those terms said. But the 290-page offering document for the New Riders fund, which was reviewed by The New York Times, does not provide any financial details about Uber.
The investors are also not getting direct equity in Uber, but only indirectly through the fund. As a result, the fund has few protections for investors.

Nice try, Morgan Stanley, people aren't this desperate to not miss the boat on Uber's maybe-never IPO...

Even so, all this has not stopped wealthy investors from committing about $500 million to Uber’s latest round, the people briefed on the transaction said, valuing the San Francisco-based company at $62.5 billion.

So we're assuming that these super-rich MS clients are not keenly aware that Uber has taken in billions already, hasn't had an official CFO in place for a year and just spent who-knows-how-much on a "rebranding project" headed up personally by Kalanick. We're not saying the last two are connected but this is what Kalanick told Wired about the new logo he helped create (and which people seems to hate)

Most CEOs hire experts—branding agencies that specialize in translating corporate values into fonts and colors—or tap an in-house team. Not Kalanick. For the past three years, he’s worked alongside Uber design director Shalin Amin and a dozen or so others, hammering out ideas from a stuffy space they call the War Room. Along the way, he studied up on concepts ranging from kerning to color palettes. “I didn’t know any of this stuff,” says Kalanick. “I just knew it was important, and so I wanted it to be good.”

Oh, and Uber does not deny that it is still losing money.

So is Morgan Stanley doing anything to ensure that these clients don't carried away and throw all their money at a company that they don't really know much about and which about they are pretty much barred from learning too much more?

These clients must have a net worth of at least $10 million and a minimum investment of $250,000. They are not allowed to invest more than 5 percent of their net worth.

You can only lose %5 of your net worth by blindly throwing money at a huge, private, Ayn Rand-themed car service that might never go public!


Deal Shows Investors Are Willing to Make a Blind Bet on Uber [DealBook]

The Inside Story of Uber’s Radical Rebranding [WIRED]


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