Alternative investments platform iCapital Network raised $440 million in funding last week, with plans that will make investing in private equity, hedge funds, and other asset classes even easier, especially for smaller wealth managers.
Temasek, Singapore’s $381 billion state investment company, led the latest fundraising round that valued the company at $4 billion, iCapital said. Owl Rock, a division of Blue Owl Capital, MSD Partners, Noah Holdings, and Golub Capital also participated. WestCap, Ping An Voyager Partners, Blackstone, and others also invested in the company.
The company has raised a total of more than $600 million in funding, including a $146 million round in March of 2020. Lawrence Calcano, chairman and CEO of iCapital Network, declined to comment specifically about any step up in value, but told RIA Intel the money raised and the current valuation reflected the momentum of the business.
Strategically, the raise is “completely consistent with all the other raises we’ve had in the past,” Calcano said.
“We’re investing in growing our talented team, developing market-leading technology solutions, and providing a comprehensive set of educational tools. As always, we are evaluating the most advantageous acquisition opportunities to broaden our capabilities for wealth managers, asset managers, and banks globally,” he said.
Founded in 2013, the New York-based company strives to make investing in alternatives easier for wealth managers and to ultimately become as ubiquitous as the New York Stock Exchange. In addition to its own development, iCapital has also acquired nine other businesses, including Wells Fargo’s Global Alternative Investments division and AI Insight, an education, research, and compliance company.
The latest round of funding will help iCapital toward its goal of becoming an “end-to-end” solution for wealth managers, especially smaller ones. “Technology is never done, but there are definitely a number of features and functions that we are adding to the platform,” Calcano said.
Easing the administrative, compliance, and reporting burdens of investing in alternatives will make private equity, hedge funds, and other asset classes more accessible. (Others aspire to do the same.) The next step for iCapital is helping financial advisors make better allocations with portfolio construction tools, something the company is already planning.
Most private wealth managers (55%) don’t allocate any client money to alternative investments, but an argument can be made that the asset class has a place in portfolios. Private investors now account for nearly half the addressable alternative investments market (48%), up from 37% in 2007, according to Cerulli Associates.
Flush with cash, iCapital also plans to continue to expand the number of asset managers and funds on its platform. It currently has $80 billion in client assets across more than 780 funds globally. It has 450 employees across New York, Zurich, London, Lisbon, and Hong Kong and plans to hire more people and expand further.