The rise of firms such as iCapital is part of a wider story of how investments such as private equity, private credit, real estate, infrastructure and venture capital have become more popular.  

iCapital, the fintech business for alternative investments such as private equity, has agreed to buy UBS’s alternative investment manager platform in the US.

The Swiss bank’s platform, generally known as AlphaKeys Funds, holds more than $7 billion in client assets.

Under the terms of the deal, New York-based iCapital will take on the management and operation of the platform, which includes private equity, hedge fund and real estate feeder funds. UBS Financial Advisors will continue to serve its high and ultra-high net worth clients who hold feeder funds.

The transaction – financial terms of which were not disclosed – is another twist in iCapital’s ascent as a fintech platform for the alternative investments space. iCapital has been busy. In June, Bank of America made a strategic investment in iCapital, and Morgan Stanley Investment Management expanded its US partnership in July. 

The rise of firms such as iCapital is part of a wider story of how investments such as private equity, private credit, real estate, infrastructure and venture capital have become more popular. Typically less liquid than listed stocks or bonds, they have offered superior yields – a compelling proposition amid ultra-low interest rates.

UBS relationship
“iCapital has a longstanding global relationship with UBS through which we utilize our market-leading technology to facilitate the management of their direct and feeder funds on a single platform and offer their advisors the tools they need to be successful,” Lawrence Calcano, chairman and chief executive of iCapital, said.

In 2017, UBS invested in iCapital which entered into a strategic relationship with the Zurich-listed lender to structure new feeder funds for UBS to distribute. UBS also integrated iCapital’s proprietary technology into its private fund operations in order to streamline and automate its alternative investment offerings. 

In 2021, the strategic partnership was enhanced to increase digitization of the UBS Advisor experience, improving the information and analytics of clients’ private market investments across its international locations, including Switzerland, Hong Kong, and Singapore.

The transaction is expected to close during the second half of 2022. 

iCapital was founded in 2013. As of July 31, it services more than $136 billion in global client assets, of which more than $32 billion are from international investors (non-US domestic). It has offices in Zurich, London, Lisbon, Hong Kong, Singapore, and Toronto, as well as its New York HQ.