Founded in 2013 and now about one year into the launch of its online fundraising platform for private equity funds, iCapital Network continues reaching out to high net worth investors while broadening its partnerships and alliances.
While larger private equity firms benefit from iCapital’s network, the firm has also been gaining traction as a way for middle-market firms to tap a new source of capital through clients of registered investment advisors (RIAs) and wealth managers.
Lawrence Calcano, managing partner, said iCapital has worked with middle-market players such as OrbiMed Advisors on fundraising for OrbiMed Royalty Opportunities II and Trilantic Capital on Trilantic Energy Partners. The New York-based company helps placement agents on its network to use its online tools to tap investors.
For the retail community, iCapital spends time with RIAs to explain the benefits and workings of private equity, which outperforms public equities over multiple time periods. Calcano sees his company’s role increasing as a resource for the middle market.
“Many wealth managers have very limited experience investing in private equity,” Calcano said. “We’re aggregating a network and educating the market on how it works.”
The iCapital network helps GPs that lack the resources to provide individual attention to high net worth individuals (with at least $5 million of assets). The firm attends annual meetings, reads performance data and reports back to individual investors that buy into allocations in private equity funds for as little as $100,000.
For individuals, it automates reporting requirements such as fund statements and tax reporting.
Adding to its momentum, iCapital Network now works with 15 placement agents, eight of which also hold ownership stakes in the company. Some of the stakeholders include placement firms Credit Suisse, Eaton Partners, Monument Group and Park Hill, which use iCapital to raise commitments for private equity funds.
Another iCapital partner, New York-based Intralinks Holdings Inc, allows the company to offer virtual data rooms to individuals during the capital-raising process for private equity funds. The Intralinks partnership means that “high net worth investors can see institutional quality information, and a GP doesn’t need to maintain a second data room, since IntraLinks allows them to control access,” Calcano said.
All told, LPs and other investors participating in the iCapital Network collectively represent about $3 trillion. About $1.6 trillion of that comes from institutional investors and $1.4 trillion represents the total AUM of high net worth investors.
“The group of placement agents on our network looks at about 1,000 funds a year and they may as a group raise 100 funds at a time,” Calcano said. “This gives us a great array of product to look at. We’re constantly selecting the best funds in the marketplace and offering pieces of the funds out to individual investors. They don’t typically have access to great managers.”
By Steve Gelsi