iCapital Trumpets Rapid Assets Growth

Tom Burroughes

10 February 2020

iCapital Network, the US-based fintech platform that sees itself as democratizing access to alternative investments such as private equity, has chalked up a 400 per cent-plus rise in assets serviced over the past year.

As of December 31, 2019, iCapital served more than $46.6 billion in invested capital across approximately 470 funds, 100,000 underlying accounts, and 55 white label partners, it said in a statement earlier this week. The organization has increased assets serviced by its platform more than five-fold since year-end 2018, including $12.1 billion in organic platform growth coupled with strategic partnership acquisitions.

In 2019, iCapital closed its acquisition of Bank of America’s alternative investment feeder fund operations and solidified a strategic relationship with Morgan Stanley to oversee ongoing operations and administration functions of the firm’s alternative investment feeder fund assets.

The rise of business models such as iCapital's plays to the idea of widening access to private equity, hedge funds, private credit, forms of real estate and infrastructure, and other otherwise hard-to-enter areas. In the past such asset classes were typically dominated by institutional investors and large family offices. CAIS, Mercury Capital Advisors and Artivest are among other entities in the space. In another twist, the Securities and Exchange Commission has pushed to widen access to these areas.

“2019 was a breakout year for iCapital, positioning us to fundamentally change the industry,” Lawrence Calcano, chief executive of iCapital Network, said. “iCapital has evolved from connecting two end points in the alternative investing lifecycle – the buyer and the seller – to establishing and automating the entire ecosystem."

In 2019, iCapital signed agreements with IEQ Capital, Janney Montgomery Scott, Keebeck Wealth Management, Personal Capital, United Capital, First Republic, and SunTrust. Among fund managers that partnered with iCapital in 2019 were CIM Group, PIMCO, and Brookfield.

In October 2019, iCapital announced an expanded relationship with Schwab Advisor Services, allowing independent advisors that custody with Schwab to manage iCapital investments directly on the Schwab Alternative Investment Marketplace platform.

The firm said that its build-out last year took it outside the US. Foreign money accounts for more than 15 per cent of platform assets. In 2018, iCapital opened its first international office in Zurich. In 2019, iCapital expanded its international marketing efforts to present solutions across the globe, including Asia, the Americas and the Middle East.

Headcount has grown. Last year iCapital almost doubled the total payroll to 218 employees. Among its more prominent hires was Michael Kushner, who was named as chief financial officer; Jennifer Ashley was named as chief people officer, and Stephen Jacobs was named as general counsel.