(Bloomberg) — Coatue Management is looking to raise $1 billion to amplify bets on artificial intelligence and tech innovation, marking the first time in several years it has sought cash for the flagship fund.
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The tech-focused hedge fund firm will raise most of the capital from institutional investors, with a smaller amount coming from wealthy individuals through a new arrangement with Raymond James and Associates, according to people familiar with the matter.
Coatue, which oversees almost $50 billion of assets, hasn’t made such an arrangement to tap bank or brokerage clients since 2017.
A representative for Coatue declined to comment, and Raymond James didn’t return requests for comment.
Coatue founder Philippe Laffont has championed AI and contended it will drive demand for related industries such as energy and AI infrastructure. Even amid lofty valuations for some companies, he doesn’t think the opportunity to invest has passed, he said in a July interview at the Bloomberg Invest Summit. Human-like robots with AI-powered brains could be about 15 years away, he said.
“What I wonder is, what happens when you put that brain inside of a robot and we humans then live side-by-side?” he said.
Raymond James works with more than 8,000 financial advisers and will add Coatue’s fund to its existing platform of hedge funds available to their high-net-worth clients, the people said.
Coatue’s move illustrates a broader shift the hedge fund industry has been making to increasingly tap cash from high-net-worth clients, particularly as many institutional investors have cut back on allocations to the sector. The Raymond James deal will also give Coatue access to financial advisers, who are a main conduit to many wealthy individuals.
In 2017, Coatue set up a similar arrangement with Morgan Stanley, and it has also raised capital through J.P. Morgan Securities. Wealth clients from both firms will also be able to invest in this latest raise.
Coatue’s hedge fund manages about $14.3 billion and is up almost 15% so far this year through October, one of the people said. The fund is the firm’s largest, and makes bets on both public companies and private startups.
Raymond James and Associates had almost $170 billion of gross assets under management on behalf of high-net-worth individuals at year-end, according to its latest registration with the US Securities and Exchange Commission.
