iCapital Network connects GPs with wealthy investors and advisers
Platform offers end-to-end automation of alternative investment process
UBS recently joined BlackRock as a strategic investor
Lawrence Calcano says he spends his working hours on three things: strategy, clients and culture.
As CEO of iCapital Network, Calcano is focused first of all on “building out all the parts of the value chain in the relationship between the GP and an LP. What we’re trying to do is be the platform that all the alternatives in the high-net-worth marketplace flow through.”
Founded in 2013, iCapital provides technology that connects wealthy investors with PE and hedge fund managers. “We’re working mostly with advisers,” Calcano said, “whether they sit with UBS or the independent RIA community.”
UBS is now a strategic partner, having recently invested an undisclosed amount. The Swiss giant will make use of iCapital’s technology in its own wealth-management services, automating processes like subscription and reporting.
The platform is “very modular in terms of the value it offers both the investor and the adviser,” Calcano said. Some members of the iCapital Network — which includes banks, independent RIAs, and family offices — use all aspects of the technology, while others require only certain capabilities.
“An RAI doesn’t necessarily have a lot of access to great general partners. They rely on our origination and due diligence,” as well as using iCapital’s execution functionalities to handle capital calls, distributions, and more, he said.
Other users, as with the example of UBS, “don’t necessarily use our origination and due diligence; GPs already have relationships with UBS. They’re relying on us for the service and technology part of our offering.”
On the GP side, iCapital facilitates tapping into the multitrillion-dollar high-net-worth market. “I think it’s becoming very clear, certainly to GPs, that it’s smart to think broadly about how and where they raise capital,” Calcano said. With the institutional part of the market becoming saturated, individuals and family offices represent “a very important area for fundraising opportunities.”
While a large investment from a single source of capital — $500 million from CalPERS, say —doesn’t require a lot of technology to manage, “take the same quantum of dollars raised in $300,000 chunks: one investor becomes one thousand, and technology becomes very necessary to process and scale at that number.”
One large GP client is Carlyle Group, which annually offers an investment vehicle for individuals called Private Equity Access. This and other Carlyle products use iCapital to handle administrative tasks. “That’s a service to them,” Calcano explained. “They want to be able to call on the marketplace; obviously they manage the money, but they don’t necessarily want to manage all the operations.”
BlackRock is another investor and partner. “A lot of their clients are very much looking for expanded access to alternatives,” he said. “They have a relationship with so many institutions, independent RIAs, banks, etc., we felt that in addition to the capital they would be a very strong and successful strategic supporter of the company.”
Lawrence Calcano, CEO, iCapital Network. Photo courtesy of the firm.