The latest development adds to a busy few years for the US-based fintech platform, which in some ways sees itself as "democratizing" access to alternative investments such as private equity, infrastructure and private credit.
iCapital Network, a fintech platform widening access to alternative assets such as private equity, yesterday announced that BNY Mellon’s Pershing has improved its technology channels making it easier for advisors to handle investment requests.
Pershing provides broker-dealers and registered investment advisors with solutions including investments on its Alternative Investment Network.
Advisors can upload documents easily when processing subscriptions for investments such as private equity, private credit, hedge funds, and real estate on behalf of clients. Investment forms can be transmitted digitally, eliminating the need for advisors to upload forms manually.
The Pershing systems are part of the “plumbing” of the modern financial world, which is increasingly digital, stripping out the need for paper-based forms and hopefully cutting risks of delay and mistakes.
“Our clients have found the paperless, digitally enabled aspects of the iCapital offering to be an advantage in their efforts to ensure the continuity of their business during this critical time,” Tom Fortin, chief operating officer and managing partner of iCapital Network, said.
According to a recent survey of iCapital’s network, in light of recent market volatility, advisors are increasingly considering client allocations to private equity and hedged strategies.
As of June 30, 2020, iCapital Network served more than $52 billion in client assets across 497 funds. In May this year iCapital acquired wealth advisory business Artivest.
iCapital has been busy. In October 2019 it expanded its business links with Schwab Advisor Services, adding to a run of alliances. Among recent developments, iCapital added four senior figures to its executive team: Michael Kushner, chief financial officer; Jennifer Ashley, chief people officer; Diane Frankenfield, chief marketing officer; and Stephen Jacobs, general counsel. In April 2019 it entered into an exclusive relationship with The Nasdaq Private Bank, building a secondary market for private equity funds. In October 2018, HSBC Global Private Banking, Americas agreed with iCapital Network to speed up the process whereby clients can tap into alternative investments such as private equity at far lower minimums than operate at present. Early in 2020 it signed a partnership with Boston-based State Street.
The platform hosts investments such as private equity, credit, real estate and other “alternative” asset classes, and is part of a shift whereby investors can get more access to areas previously the preserve of the ultra-wealthy or large institutions. Regulators are to some extent encouraging this “democratization” of alternative asset class investing. Late last year the Securities and Exchange Commission, the US regulator, amended the definition of accredited investor, one of the principal tests for who is eligible to participate in private capital markets. A concern that regulators around the world have had is that investors’ expectations about liquidity and access to funds may not fit with what private markets involve.