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Temasek Leads New iCapital Network Investment Round

iCapital Network has raised $440mn in its latest funding round. Temasek led the round, joined by new investors Owl Rock (a division of Blue Owl Capital); MSD Partners, L.P.; Noah Holdings and Golub Capital. Additional commitments came from existing investors WestCap, Ping An Voyager Partners, Blackstone, UBS, Pivot Investment Partners, BNY Mellon, Wells Fargo, Morgan Stanley and Goldman Sachs Asset Management. Today, the company’s valuation is approximately $4.0bn.

The company will use the proceeds from the capital raise to enhance its platform technology, expand the breadth of strategies and product types on its alternative investment menu, and pursue strategic acquisitions that will broaden its client capabilities.

“We are honored to welcome such a renowned group of strategic investors into our latest fundraising round,” said Lawrence Calcano, Chairman and Chief Executive Officer of iCapital Network. “Their conviction in iCapital validates the achievements of our team to date and our ongoing efforts to expand alternative investing opportunities to wealth advisors and their clients in the years ahead. We’re investing in growing our talented team, developing market-leading technology solutions, and providing a comprehensive set of educational tools. As always, we are evaluating the most advantageous acquisition opportunities to broaden our capabilities for wealth managers, asset managers and banks globally.”

iCapital’s growth is driven by a commitment from financial advisors to provide a diverse set of quality private market investment opportunities to meet accelerating appetite from their high-net-worth clients. This increased demand for alternatives is driven by the limited opportunities of shrinking public markets, a prolonged low interest rate environment, and investors’ desire for an expanded set of investment opportunities to provide portfolio diversification and counterbalance persistent market volatility. A recent joint 2021 wealth and asset management report from Morgan Stanley and Oliver Wyman, Competing for Growth, projects that additional HNW allocations to private market investing opportunities will represent around US$1.5trn of assets under management by 2025.

“We are pleased to have the opportunity to deepen our partnership with iCapital,” said Todd Myers, Chief Operating Officer of Blackstone’s Private Wealth Solutions group. “Blackstone is committed to bringing institutional-quality private market solutions to individual investors. Our shared vision with iCapital, centered around providing an outstanding advisor and client experience alongside alternatives education, has enabled us to deliver our industry-leading capabilities to more individual investors across the globe.”

“Many high-net-worth investors remain under-allocated to alternative investments relative to institutional investors, but are increasingly exploring the larger role these strategies can play in portfolio construction,” said Gregg Lemkau, Chief Executive Officer of MSD Partners, L.P. “The market opportunity to open up access and digitize alternative investing in this space is substantial, and we believe iCapital is extremely well positioned to capture it.”

“After more than 10 years of working together, the WestCap team is excited to scale our equity position in iCapital, the dominant digital alternative investment distribution platform,” added Laurence Tosi, Founder and Managing Partner of WestCap and former CFO of Blackstone and Airbnb. “iCapital provides unmatched support to advisors seeking to furnish their high-net-worth investors with opportunities to meet their portfolio goals by offering access to a broad array of quality alternatives managers and strategies.”

Since announcing its last fundraising round in March 2020, which the company ultimately closed at $162mn, iCapital has grown platform assets from $46bn to more than $80bn, doubled its headcount, made five acquisitions, expanded its technology and education capabilities, launched tailored offerings for accredited investors, widened its international footprint, and launched more than 45 new white labels with partners across the globe.

Goldman Sachs & Co. LLC served as placement agent on the transaction. Terms of the capital raise were not disclosed.

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