Fintech company iCapital Network Inc., a provider of alternative investment products to financial advisers, plans to acquire rival Artivest Holdings Inc. in a deal that would combine two platforms used to give qualified clients exposure to private equity, private credit, hedge funds and other investments.
The deal includes the purchase of the majority of Artivest’s assets, including all technology and its operating platform, according to a release. iCapital will also take over the management of Artivest’s 28 proprietary alternative investment funds and its Open Network platform, which offers alternatives to approximately 1,800 financial advisors and their high-net-worth clients.
Terms of the deal were not disclosed.
Founded in 2001, Artivest surpassed $1 billion in new online investments transacted by high-net-worth investors into private funds last year.
Lawrence Calcano, CEO of iCapital Network, said given the shared missions of both firms to open up access to alternatives, the deal will create new platform partners and strategies, and provide more options to the clients and asset managers at both firms.
"Advisers need to compete with huge asset managers like BlackRock, so having options is always good for advisers," said Craig Iskowitz, chief executive of Ezra Group, a technology consulting firm in the financial advice industry. "I see this deal as a net positive for them."
The acquisition comes on the heels of iCapital’s $146 million funding round in March, led by Ping An Global Voyager Fund with participation from Goldman Sachs and others. In a release that accompanied the announcement, iCapital said the funds would be used to grow internationally and further its commitment to market education.
Assets serviced by iCapital has exploded to $51 billion to date, up from just $8 billion at the start of 2019, across more than 650 funds, according to a company release and data on its website.
Last October, Schwab Advisor Services tapped iCapital Network to provide independent registered investment advisers easier access to alternative investments. The technology allows advisers at Charles Schwab to pre-qualify clients and provide them with research on the funds. By aggregating assets across multiple investors, iCapital lowers the minimum investment for alternatives to $100,000 on the platform.
iCapital also powers alternatives platforms at JPMorgan Chase and Fidelity Investments.
As part of the transaction, 28 Artivest team members are expected to join iCapital. The tech platform significantly expanded its senior leadership and added more than 100 employees last year to bring its total headcount to 229 in April.
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