UBS and iCapital entered into a definitive agreement under which iCapital will acquire UBS Fund Advisor, the wirehouse's legacy proprietary U.S. alternative investment manager and the feeder fund platform it manages.
The platform, widely referred to as AlphaKeys Funds, represents over $7 billion in client assets, the companies said Tuesday in a joint announcement.
Terms of the transaction, expected to close in the second half of 2022, were not disclosed.
As part of the deal, iCapital will take control of the management and operation of the platform, which includes private equity, hedge fund and real estate feeder funds, the firms said.
But UBS Financial Advisors will continue to serve its high- and ultra-high net worth clients that hold feeder funds as the company always has, "providing advice and solutions to help meet their unique needs and financial goals," according to the companies.
iCapital and UBS already had a "long-standing global relationship … through which we utilize our market-leading technology to facilitate the management of [the UBS] direct and feeder funds on a single platform and offer their advisors the tools they need to be successful," Lawrence Calcano, iCapital CEO and chairman, said in the announcement.
The new pact expands that relationship to include management of UBS Fund Advisor and the feeder fund platform, he said.
UBS became an investor in iCapital in 2017 and entered into a strategic relationship with the company to structure new feeder funds for UBS to distribute. At that time, UBS also integrated iCapital's proprietary technology into its private fund operations to streamline and automate its alternative investment offerings.
In 2021, the strategic partnership was enhanced to further digitize the UBS Advisor experience, enhancing the information and analytics of clients' private market investments across its international locations, including Hong Kong, Singapore and Switzerland.
ICapital previously acquired: a business that administered Morgan Stanley's alternative investment feeder funds, assuming oversight of 115 Morgan Stanley feeder funds, in 2019; Bank of America's alternative investment feeder fund operations in 2018; Wells Fargo Investment Institute's Global Alternative Investments Feeder Fund Platform in 2020; and Stifel's alternative investment feeder fund platform in March 2022.
As of July 31, iCapital serviced over $136 billion in global client assets, of which more than $32 billion were from investors outside the U.S., across more than 1,080 funds, it said.
