There appears to be no shortage of capital available for the fintech and wealthtech sectors of late. Alternatives platform provider iCapital Network is the latest firm to benefit from the largesse. The firm announced a megaround totaling $440 million from an international cohort of new and returning investors. Its valuation now sits at about $4 billion.
In a statement, Lawrence Calcano, chairman and CEO of iCapital Network, hinted at the expansive nature of the firm’s goals by saying his firm would be “evaluating the most advantageous acquisition opportunities to broaden our capabilities for wealth managers, asset managers and banks globally.”
While terms of the deal were not disclosed, leading the round is Singapore-based Temasek, a private firm whose sole shareholder is the Singapore Ministry of Finance. New investors include Owl Rock, MSD Partners, Golub Capital and China-based wealth management service provider Noah Holdings, which is headquartered in Shanghai.
Returning investors included WestCap, Blackstone, UBS, Pivot Investment Partners, BNY Mellon, Wells Fargo, Morgan Stanley, Goldman Sachs Asset Management, and Hong Kong–based Ping An Voyager Partners.
The international participation, especially from the APAC region, stood out to Wally Okby, senior analyst for Aite Group's wealth management division.
“One of the first things that caught my attention was the investor mix—a huge sovereign wealth fund in Temasek—the fact that they led the round sent a few signals to me,” said Okby.
The first of those signals, he said was that in terms of types of investment strategy, “they are long-term investors, you don’t get much more longer term than them,” he said.
“The fact that they led the round, and the sheer size of the round, helps validate that there is a lot of room for growth in private markets and illiquids in individuals’ investment portfolios across the globe—so it’s not just a U.S. but a global phenomenon,” said Okby.
Ping An led iCaptial’s last $146 million round from March 2020. Since that raise, platform assets have grown from $46 billion to more than $80 billion and the company has doubled its head count. In addition, iCapital has made five acquisitions and “widened its international footprint,” having launched “more than 45 new white labels with partners across the globe.”
Earlier this month, iCapital, along with Envestnet and UBS, launched the Alternatives Exchange, a platform where independent advisors and their high-net-worth clients will be able to browse, purchase and sell private investments such as real estate, hedge funds and private equity.
Proceeds from the new funding are to be put toward technology improvements on iCapital’s platform and for expanding both the breadth of strategies and alternative investment product types available on it. The statement also noted that the funding could be used for strategic acquisitions that will broaden iCaptial’s client capabilities.
“The support of iCapital’s latest strategic investors will allow iCapital to continue hiring experienced professionals focused on technology, due diligence and client relationships, and to enhance the products and capabilities advisors have access to through our platform,” said Bob Worthington, managing director and head of Independent Wealth Solutions at iCapital Network, in an email.
Another signal Aite’s Okby said he sees in the news is the sheer size and the time frame of the raise.
“They have raised a lot of capital in a short amount of time, and mostly from financial players,” he said. “I get the impression, but can’t say definitively, that they are primarily using the money raised to grow their market share as quickly as possible.” said Okby.
In so doing he said, the firm has made the case to its investors but will now have to begin showing results before any subsequent rounds will be forthcoming.