iCapital Debuts Tool to Aid Advisers in Recommending Alts Within Portfolios

iCapital, a global fintech platform powering the alternative investment marketplace, debuted a portfolio construction tool called Architect. With the launch, more than 350,000 U.S. financial advisers can access Architect on the iCapital Marketplace.

Architect combines a user-friendly interface with sophisticated analytics to evaluate alternatives and structured investments alongside traditional assets and design portfolios that align with their clients’ return objectives and risk profiles.

Architect’s advanced analytics and visualizations allow the wealth management industry to evaluate the impact of adding alternatives – such as private equity, private credit, hedge funds, private real estate funds – and structured investments, to an existing portfolio that includes traditional investments, including equity, fixed income, ETFs, and mutual funds. Advisers can also fold in custom assets and run them through Architect’s models, allowing them to evaluate non-traditional client assets. The tool compares scenarios and simulates historical performance; identifies macroeconomic portfolio return drivers; and evaluates the projected portfolio against a client’s investment objectives.

“In building out the industry operating system for investing in private markets, we’ve been very thoughtful about how to give advisers an enhanced set of tools to supplement the ones they already have in the 60/40 world,” said Lawrence Calcano, chairman and chief executive officer of iCapital. “Architect is a real-time tool for advisers to explore allocations to alternatives, support diversification goals, and ultimately build holistic portfolios that offer enhanced return and income opportunities.”

The launch on iCapital Marketplace follows a six-month beta phase involving 300-plus wealth managers, including more than 150 registered independent adviser firms. The announcement follows iCapital’s new strategic relationship with Morningstar, previously reported by The DI Wire. Through that integration and once completed, more than 170,000 advisers can subscribe to Architect through the Morningstar Advisor Workstation.

“Our goal is to make alternative assets available to all for whom the assets are suitable and appropriate because we believe that advisers and clients can benefit from exposure to these asset classes. But expanding access requires a comprehensive platform that optimizes the process with the right technology, and a richer set of portfolio analytics tools and data. Architect is an important part of that equation, and helps advisers analyze and explain how the inclusion of alternative strategies can diversify and strengthen client portfolios” Calcano added.

Advisers who took part in the beta phase said it helped elevate the investment experience. Analysis allowed advisers to evaluate a potential asset allocation in terms of the opportunity for returns, liquidity, ability to protect from downside, and the simplicity or complexity of the asset’s structure along with a historical evaluation of asset performance.

iCapital is a global fintech company powering the alternative investment marketplace. iCapital’s solutions enable organizations to streamline and scale their operational infrastructure for alternative investments and to provide access to direct investments and feeder funds at lower minimums through simplified digital workflows. iCapital employs more than 1200 people globally, and has 13 offices worldwide including New York, Greenwich, Zurich, Lisbon, London, Hong Kong, Singapore, Tokyo, and Toronto.

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