iCapital acquires UBS legacy alternative investment feeder fund platform

iCapital acquires UBS legacy alternative investment feeder fund platform
The fintech has purchased UBS Fund Advisor, the wirehouse’s legacy proprietary U.S. alternative investment manager and feeder fund platform that represents $7 billion in client assets.
AUG 23, 2022

Alternative investments fintech iCapital is acquiring yet another firm’s alternative investment feed fund business.

The company announced that it would assume the management and operation of UBS Fund Advisor LLC, the wirehouse’s legacy proprietary U.S. alternative investment manager and feeder fund platform. The platform, also known as AlphaKeys Funds, represents $7 billion in client assets and includes private equity, hedge fund and real estate feeder funds. The purchase will bring the total assets that iCapital services to $136 billion.

Terms of the deal, which is expected to close in the second half, were not disclosed.

This is iCapital’s eighth acquisition of another firm’s alternatives business, said chairman and chief executive Lawrence Calcano. The New York City-based company acquired Stifel Financial Corp.’s alternative investment feeder fund platform in March.

While other deals represented a new relationship with a financial institution, this deal is unique in that iCapital has been building and managing new feeder funds for UBS since the wirehouse invested in the fintech in 2017, Calcano told InvestmentNews. UBS advisers already use iCapital’s technology, but now the older funds will be migrated to iCapital’s digital infrastructure.

“We’re going back and lifting out the legacy book and effectively marrying the two platforms together,” Calcano said. “For UBS, it will create one platform in which all of these [alternative] products will be managed … hopefully creating an even better adviser experience.”

Though iCapital is helping to replace a manual workflow with automation, that doesn’t mean anyone is losing their job, he added. The UBS team that manages the book will all join iCapital. “It’s about future growth, not about eliminating jobs today,” Calcano said.

A $497 million round of funding in 2021 valued iCapital at more than $6 billion, and the firm has deployed much of that to grow through M&A. The deal with UBS is iCapital’s 14th acquisition overall, with the most recent being its purchase of Simon Markets, a fintech providing advisers access to structured investments, annuities and risk-managed products.

While M&A has been a key element of iCapital’s growth, the deals have only been successful thanks to the company’s underlying organic growth, Calcano said. “We can make these acquisition and incorporate them because of the organic growth that is inherent and still significant in the business.”

UBS advisers will continue to serve clients that hold feeder funds as they have been without interruption.

UBS did not respond to a request for comment.

Latest News

RIA moves: True North adds $353M California RIA as SageView grows North Carolina presence
RIA moves: True North adds $353M California RIA as SageView grows North Carolina presence

Plus, a $400 million Commonwealth team departs to launch an independent family-run RIA in the East Bay area.

Blue Owl Capital, Voya strike private market partnership for retirement plans
Blue Owl Capital, Voya strike private market partnership for retirement plans

The collaboration will focus initially on strategies within collective investment trusts in DC plans, with plans to expand to other retirement-focused private investment solutions.

Top Commonwealth advisor to recruiters: Stop with the cold calls already!
Top Commonwealth advisor to recruiters: Stop with the cold calls already!

“I respectfully request that all recruiters for other BDs discontinue their efforts to contact me," writes Thomas Bartholomew.

Why AI notetakers alone can't fix 'broken' advisor meetings
Why AI notetakers alone can't fix 'broken' advisor meetings

Wealth tech veteran Aaron Klein speaks out against the "misery" of client meetings, why advisors' communication skills don't always help, and AI's potential to make bad meetings "100 times better."

Morgan Stanley, Goldman, Wells Fargo to settle Archegos trades lawsuit
Morgan Stanley, Goldman, Wells Fargo to settle Archegos trades lawsuit

The proposed $120 million settlement would close the book on a legal challenge alleging the Wall Street banks failed to disclose crucial conflicts of interest to investors.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.