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Morningstar, iCapital Partner to Expand Access to Alternative Investments and Insights

Morningstar, iCapital Partner to Expand Access to Alternative Investments and Insights. Alternative investments, Morningstar, iCapital, Advisor Workstation, portfolio risk, portfolio analytics

Morningstar Inc., a provider of independent investment insights, and iCapital, a global fintech platform with an emphasis on alternative investments, announced a strategic relationship to provide Advisor WorkstationSM users with access to alternative investments and analytics for the first time.

The integration equips Advisor Workstation’s more than 170,000 users with alternative investment research and tools to evaluate private assets side-by-side with traditional investments. Coupled with investment proposal and report capabilities in Advisor Workstation, the solution empowers advisers to offer holistic recommendations and build diversified portfolios that include alternative assets for clients.

“…Advisor Workstation’s integration with iCapital is unique because it’ll be end-to-end. Advisers will be able to include alternatives alongside traditional investments in model portfolios, reports, and proposals,” said Vimal Vel, chief product officer for Morningstar’s Enterprise group.

“We are enormously excited to forge this relationship with Morningstar…” said Lawrence Calcano, chairman and chief executive officer at iCapital.

“Our simple, intuitive technology interface ensures that Advisor Workstation users have access to both the right products for their clients and an extensive library of educational resources to make informed decisions relating to portfolio allocations and diversification strategies,” added Calcano.

With the recent completion of the first phase of the strategic relationship, independent adviser clients now have access – through a single interface – to both iCapital Marketplace, a platform featuring the industry’s broadest selection of alternative investment funds, due diligence and education resources, fund subscription processing, and third-party reporting services, and iCapital Architect, an innovative portfolio construction and analysis tool for financial advisers to build robust, personalized client portfolios incorporating alternatives.

Phase two, coming in the first half of 2024, will bring the integration to Advisor Workstation’s Enterprise-level clients and leverage iCapital’s analytics to generate Morningstar’s portfolio risk score, a numeric score that represents the risk level of a given portfolio against the Morningstar Target Allocation Index Family, when alternatives are added to client asset allocations.

According to Morningstar, the demand for alternatives is forecasted to increase. Advisers are responding to client needs and an uncertain market environment by offering more products – in the form of alternative assets. A study found that advisers offering a wide variety of products to their clients say alternatives (e.g., cryptocurrency, structured products, liquid alternatives, REITs, private debt, and private equity) make up between 14% and 19% of their total assets under management. In addition, an iCapital survey found that 50% of all advisors said client interest in alternative investments has increased over the past two years.

Morningstar is a global provider of independent investment insights offering an extensive line of products and services for individual investors, financial advisors, asset managers and owners, retirement plan providers and sponsors, and institutional investors in the debt and private capital markets.

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.

For more iCapital news, please visit their directory page.