Morgan Stanley has sold its alternative investments feeder fund business to the rapidly-growing FinTech platform iCapital Network.
The bank becomes the latest high-profile investment bank to partner with iCapital, with Bank of America, Credit Suisse and Deutsche Bank among those to have outsourced some technology functions to help cut costs at their alternatives business.
iCapital has also secured strategic backing from some of the biggest investment and custody banks including JP Morgan and BNY Mellon, as well as BlackRock, Blackstone and The Carlyle Group.
The latest agreement makes iCapital the exclusive feeder fund services provider for Morgan Stanley’s Wealth Management Alternative Investments group.
iCapital will assume oversight of 115 Morgan Stanley feeder funds which invest in private equity, hedge funds and real estate for the bank’s wealth management arm.
iCapital’s technology platform solution will be leveraged to streamline ongoing operations and administration services for the funds and provide support to advisors and their high-net-worth client base.
“Our relationship with iCapital will bring greater scale and efficiency to our feeder fund business as well as enhanced technology and reporting to our advisors and clients,” said Jeremy Beal, head of alternative investments, Morgan Stanley.
The transaction was completed on 14 March, iCapital stated, but did not disclose the terms of the purchase.
“Morgan Stanley has been a trusted, strategic business associate of iCapital for the last two years, and this agreement is testimony to the collaborative nature of our relationship and common goal to enhance the alternative investing process for advisors and their clients,” added Lawrence Calcano, CEO, iCapital Network.
The agreement with Morgan Stanley will boost assets serviced by iCapital from $28 billion to $40 billion.