Funds run by Fidelity, T. Rowe Price and Morgan Stanley's investment management arm have become the most aggressive pre-IPO investors in the fund industry, U.S. regulatory filings show. Fidelity's $111 billion Contrafund alone had at least $900 million invested in late-stage, pre-IPO companies at the end of April, fund disclosures show. The fund's pre-IPO investment in photo-sharing website Pinterest, valued at $419 million, was more than its stakes in Home Depot ($356 million) and General Motors ($342.5 million).
Boyd said Fidelity funds typically have less than 1 percent of their assets invested in pre-IPO companies. Some of the biggest bets, as disclosed by the funds, are on Uber, Pinterest, Intarcia Therapeutics Inc and Space Exploration Technologies.
But Morgan Stanley's $2 billion Small Company Growth Fund takes a much more aggressive approach. For example, about 5 percent of the fund's assets are invested in pre-IPO companies.
And one of the single biggest pre-IPO bets, as a percentage of fund assets, is the Morgan Stanley fund's nearly $50 million investment in Flipkart, India's biggest e-commerce firm. That's 3 percent of the fund's assets, disclosures show.