iCapital, an alternative investments platform used by more than 100,000 financial advisors and more than 250 asset managers, on Wednesday launched a new portfolio analytics tool built specifically for financial advisors.
The company says the new portfolio construction tool, iCapital Architect, will help advisors build robust, personalized client portfolios that incorporate alts and structured investments alongside traditional assets in one interface. Advisors can also use it to evaluate historical performance and run “institutional-quality” risk factor analyses.
Founded in 2013 with the mission to democratize alternative investments, iCapital has grown to service more than $159 billion in client assets across more than 1,288 funds. Since 2021, the company has raised close to $500 million in outside investments. It was valued at $6 billion in 2022.
iCapital told RIA Intel that Architect has been in the works for 3 years. About 200 advisors participated in the beta test and are now actively using the tool. The company said it created the tool not only because the demand for alts and structured investments has continued to grow but also as a response to feedback from advisors who wanted a way to differentiate their practices and help clients meet their goals.
“A relatively small portion of advisors are actively using alternatives in client portfolios today, despite the potential benefits. Enabling advisors to learn about alternatives and evaluate how they impact portfolios may help more advisors incorporate alternative investment options that improve outcomes for clients,” Anthony Polemis, senior vice president of platform intelligence for iCapital Architect, told RIA Intel in an email.
iCapital believes that alts remain a blind spot in many portfolio construction offerings.
“Many portfolio analysis and construction tools available on the market today do not properly handle alternatives due to data challenges and analytical complexity. As a result, many forward-thinking advisors who want to evaluate the impact of adding alternatives to client portfolios rely on spreadsheets, intuition, or back of the envelope math before investing,” Polemis said. “We built Architect to deliver a set of capabilities for advisors that allows them to holistically understand the impact of adding alternatives to client portfolios and better communicate those decisions to clients.”
According to the company, iCapital Architect is available as a standalone tool but can also be integrated into existing advisor proposal tools.
The company believes that this tool is another step forward in its mission to democratize alternative investments.
“Alternative solutions (like private equity, private credit, hedge funds, registered funds, and structured investments) have the potential to deliver investors uncorrelated return potential, downside mitigation, or risk diversification when included in a portfolio,” Polemis said. “Architect delivers advisors even more value, enabling them to not just learn about alts, but build portfolios with them.”
