There are countless technology providers in the asset management space, and the number continues to grow as technology rapidly evolves, thanks in large part to AI.
According to S&P Global, global IT spending is expected to grow 8% in 2024, up from 4% last year. Part of the growth will be driven by market revitalization and a drive to stay ahead of market trends.
iCapital, one of the leading fintech platforms for advisors in alternative investments, has been undergoing rapid product expansion this year, some of which is powered by AI. The New York-based global fintech released a new distributed ledger technology (DLT) on May 23, welcoming UBS Wealth Management as the first distributor to use the technology. That same month, the company launched a new model portfolio called iCapital Multi-Asset Portfolio (iMAP) to help advisors more easily integrate alternative investments with traditional market portfolios.
“Advisors now have an easier way to not only understand how these fit into the world, but also allocate them and do it at scale,” Jason Broder, managing director and chief product officer at iCapital, said of iMAP.
This technology vendor profile is one in a series of mini-profiles that spotlight vendors to help advisors make informed decisions about the technology they choose.
name: iCapital
Website:
Established in: 2013
iCapital Size: The wealth management fintech has over $191 billion in platform assets and 102,000 professional financial users.
Products and services offered: iCapital is a global alternative investment focused wealth management platform that uses cloud-based technology and AI tools to deliver several key features: iCapital Architect, which the company calls a “real-time scratchpad” for advisors to build alternative and structured investments into their portfolios, the iMap tool to help advisors analyze such investments, and distributed ledger technology that aims to process alternative transactions securely and seamlessly.
Distributed ledger technology “eliminates the need to email PDFs and spreadsheets back and forth,” Broder said, “Instead, everything is shared over consumer APIs. And we think that’s where the market is heading.”
iCapital serves: A private bank specializing in managing portfolios for advisors, asset managers, fund managers, wirehouses and high-net-worth clients, iCapital counts a handful of large custodians on its roster, including Ameritrade, BNY Mellon’s Pershing, Charles Schwab and Fidelity.
The problem iCapital is trying to solve: As alternative investments grow in popularity, Broder said iCapital wants to create a faster, more seamless way for advisors to understand alternative investments and how they can fit into their traditional investment portfolio mix.
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According to a BCG report released in May 2024, alternative investment products generated more than half of global revenue in 2023, despite accounting for less than a quarter of the $120 trillion in assets under management.
However, as with any alternative investment, there are risks associated with any new investment, including difficulties in filing correct tax returns and forms.
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What sets iCapital apart from its competitors: iCapital takes a holistic approach, wanting to offer a full range of alternative investments rather than a select few vendors offering highly sophisticated products and services.
To be clear, there is no universally right or wrong way to do things. When embarking on a new technology venture, asset managers must first determine what they are trying to solve and what is needed to solve that problem.
In the case of iCapital, Broder said the fintech wants to become a universal service provider in the global market for alternative investments.
“Many other
cost: Pricing isn’t clearly defined on iCapital’s website, but that’s typical for large fintech providers that offer a range of services; you have to sign in to access the demo. When asked about pricing and whether it’s based on a subscription model, number of users or cloud usage, Broder replied: “It’s all true. We offer a range of products and services, so the price varies depending on what you use and how you use it.”
Future plans/new developments: Broder said the new Architect and iMaps are part of a “three-legged stool,” with the third stool coming in the coming months and being the ability to streamline these capabilities at scale in one model.
“Advisors will not only understand how these fit into the world, but they’ll have an easier way to allocate them and execute at scale,” he said. “This is a three-legged stool that I think will be a game changer.”
