iCapital Network Inc., a provider of alternative investment products to financial advisers, announced Monday a partnership with Grayscale Investments to offer its network of more than 6,700 advisers access to digital currency investment strategies.
Advisers on iCapital’s platform will be able to allocate digital currency investments for their high-net-worth clients through a Grayscale diversified market-cap weighted investment strategy. This is the first time a digital currency offering will be available on the iCapital platform, according to the announcement.
In addition to its new digital asset offering, iCapital gives advisers and their clients access to private equity, private credit, hedge funds and other alternative investments to increase diversification of portfolios. In July, iCapital raised a new round of funding that pushed its valuation to $4 billion, enabling the firm to expand its current menu of alternative investment products, enhance its technology platform and pursue more acquisitions to broaden its client footprint.
“Advisers and their clients have expressed increasing appetite for uncorrelated return potential in their portfolios, and digital currencies are at the center of the conversation right now,” said Lawrence Calcano, CEO of iCapital Network in a statement.
Founded in 2013, Grayscale is the largest asset manager in the digital currency space with $43 billion in assets under management and 15 digital currency investment strategies, including six SEC-reporting investment products. Grayscale’s regulated products enable investors to access digital assets in their investment portfolios alongside traditional investment options including stocks, bonds and ETFs.
“The digital currency landscape is complex and ever-evolving, which can make it difficult for advisers and their clients to determine the most appropriate methods to access the asset class,” said Hugh Ross, chief operating officer of Grayscale, in a statement.
According to a Grayscale Investments and InvestmentNews survey, 61% of advisers had been approached for information about cryptocurrencies by clients, and 79% planned to increase recommendations of cryptocurrency investments in the next year if their firm recommends them.
“In a world with trillions of dollars of fiscal stimulus and negative real interest rates, the wealth management industry is recognizing the diversification benefits and inflation hedge potential that digital currencies can offer in an investment portfolio,” Ross said.
The uncertain future of regulation around digital currencies has kept advisers cautious of crypto assets, but the shift to embrace crypto as an investment vehicle for clients throughout the next year is on the rise.
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