Digital Wealth: $130B Alts fintech iCapital acquiring $7B investments feeder fund platform from UBS
Digital Wealth: $130B Alts fintech iCapital acquiring $7B investments feeder fund platform from UBS
iCapital has been UBS's partner since 2017, when UBS invested in iCapital and entered into a strategic relationship with the firm to structure new feeder funds
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Welcome to our Digital Wealth issue, the weekly news aggregator for digital investing, asset management, and wealthtech.
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North America News
⭐🇺🇸 iCapital® To Acquire US Alternative Investments Feeder Fund Platform From UBS - Businesswire, August 23, New York
iCapital, a B2B fintech for the Alternatives asset class, with $130B+ in assets across 1,000+ funds, will acquire UBS Fund Advisor LLC, the UBS proprietary US alternative investment manager and the feeder fund platform known as “AlphaKeys Funds” with $7B+ in client assets. iCapital’s platform — used by 1,300+ investment advisors and 300 family offices and wealth management firms — offers access to funds, due diligence, performance reporting, custodian integration, and compliance and tax reporting. With this deal, iCapital will manage the AlphaKeys Funds, which include private equity, hedge fund, and real estate feeder funds. UBS Financial Advisors will continue to distribute this to their clients.
In 2017, UBS invested in iCapital and entered into a strategic relationship with the firm to structure new feeder funds for UBS. At that time, UBS also integrated iCapital’s technology into its private fund operations. In 2021, the strategic partnership went deeper to digitize the UBS advisor experience around private market investments. iCapital has been on fire with fundraisers and acquisitions lately — raised $490MM at $6B last year, bought Bank of Singapore’s $2B AUM fund platform, partnered with B2B WealthTech platform AllFunds, and acquired SIMON Markets, tech focused on structured and annuity products.
Bain recently highlighted that scale is the key competitive dimension, and top players are pulling ahead of the rest, which underpins the continuous M&A activity in recent years. Both iCapital and FNZ have a lot of cash to play with and are consolidating their positions in the digital wealth management space.
As per UBS, we find it interesting that they bought Wealthfront for digital distribution to retail and mass affluent, but are selling this asset. Either, digital strategy is disconnected (likely), or they are focusing on distribution and getting rid of middleware (also likely).
🇺🇸 SMArtX Advisory Solutions Announces Partnership With Flyer Financial Technologies - PR Newswire, August 23, Florida
🇺🇸 BankProv Announces Strategic Integration With Republic - PR Newswire, August 16, Massachusetts
🇺🇸 TIFIN And ETFMG Announce Expanded Partnership To Promote Thematic ETFs To Active Investors And Advisors On Magnifi - PR Newswire, August 18, New York
🇺🇸 Connectus Wealth Advisers Launches MyConnectus, An Innovative Digital Engagement Platform That Delivers An Integrated Wealth Management Experience To Advisers And Their Clients - Yahoo Finance, August 18, New York
🇺🇸 Moran Wealth Management® Announces Launch As Independent Registered Investment Advisor - Digital Journal, August 23, Florida
🇺🇸 Venn By Two Sigma And Coinbase Join Forces To Support Institutional Investors With Digital Asset Intelligence - PR Newswire, August 17, New York
EMEA News
⭐🇬🇧 Micro-Investment App Wombat Raises £4MM - UK Tech News, August 23, London
Investing platform Wombat has closed a £4MM Series A funding round led by Fuel Ventures, which previously backed Wombat, leading its £2MM seed funding round. An additional raise came from a four-week crowdfunding campaign, bringing the total amount raised in the round to £4.2MM.
The commission-free fractional micro-investment platform lets users purchase fractions of shares in blue chip companies for a minimum cost of £10. The free subscription only lets you buy US-based stocks, whereas the £1/month subscription offers US, UK, and EU-based stocks, as well as 20+ ETFs, which the platform calls “Themes” — you may remeber Motif Investing, and also remember it didn’t work out.
Users can select from a range of themes and shares to create a personalized portfolio. One of the high-risk themes, with volatility of 21%, is called “The High-Ender”, which invests in 80 prestigious brands in the fashion, beauty, and automobile industries (e.g. BMW, LVMH, and Tesla). Since its inception on 18/02/2014, the strategy has returned 125%. Other examples of themes include ‘The Future of Food’, which focuses on companies that are innovating to create a more sustainable, safe, and fair food system, and ‘The Blockchain’, which focuses on companies that participate in the blockchain ecosystem.
Wombat is competing with London-based investing app Shares, which recently closed a $40MM Series B funding round. The platform has 150,000 users within the UK, where they can trade 1,500 stocks with just £1 and fees around 80 bps per trade. Note that Shares had no fees when it was starting out, so we may see Wombat upping its own fees as the company expands. Also, we’re starting to see more crowdfunding campaigns supporting funding rounds. Two newsletters ago, we talked about digital pensions platform Penfold raising £7MM in a Series A funding round, £1MM of which came from crowdfunding.
🇮🇱 Social Investment Platform Etoro To Acquire Fintech Startup Gatsby For $50MM - TechCrunch, August 17, Tel Aviv
See here for our short take on this
🇩🇪 Sustainable Investing Platform SageWealth Raises €500K In Pre-seed - Altfi, August 25, Berlin
🇬🇧 AJ Bell Taps Lloyds For FundBy Bank Payment Solution - Fintech Futures, August 24, Manchester
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Asia Pacific News
⭐🇲🇾 Kenanga Bets Big On Its Super App And Embedded Wealth For Their Next Phase Of Growth - Fintech News Malaysia, August 22, Kuala Lumpur
Kenanga Investment Bank Berhad, a private investment bank with more than 500,000 customers, will launch a digital wealth ‘super app’ by Q1 FY2023. As part of the announcement, the bank has also partnered with Ant Group to launch a crypto-friendly wallet within the super app.
The app will provide services, such as stock trading, robo-advisory, crypto trading, digital wallet, and foreign currency exchange. The app will also feature an e-wallet function that comes with a pre-paid card and is powered by Merchantrade. We’re intrigued to see if a highly regulated institution like Kenange Bank ends up dominating the Malaysian crypto market. Currently, Luno, Malaysia’s first crypto exchange, dominates the market with 500,000+ customers. Also, while crypto investment and trading have been legal in Malaysia, the government opposed the idea of adopting crypto as legal tender. Nonetheless, Kenanga has been an active player in the crypto industry, from the launch of their online stock trading platform Rakuten Trade (which has 250,000 users with $800MM in AUM) to the launch of their robo-advisory platform Kenanga Digital Investing (KDI) and the series of investments in companies like Merchantrade, CapBay, and Tokenize Exchange.
Embedded finance has started getting traction in the digital wealth space, and we’ve seen wealthtech firms and digital banks enter new markets at a rapid pace. For example, ZA Bank, a Hong Kong-based neobank with 500,000+ customers, launched a range of investment funds from global asset management companies, and WeLab, another Hong Kong-based neobank, expanded its wealth offerings by launching GoWealth, a platform that uses investment expertise by asset manager Allianz Global Investors to offer personalized advisory services. Additiv, a BaaS firm, released a report on embedded wealth management, in which it highlighted that the problem with financial service channels is that there are few cross-selling opportunities, which makes customer acquisition expensive. With embedded finance, however, firms can more quickly build their bundled B2C apps.
🇮🇳 Private Wealth Advisory Platform Liquide Raises Pre-Seed Funding - VCCircle, August 24, Bangalore
🇵🇰 Pakistani Wealth Management Startup Draws Venture Funding - Bloomberg, August 23, Islamabad
🇵🇭 UnionBank Selects Avaloq To Power Wealth Management Platform - Fintech Futures, August 24, Pasig
🇸🇬 HSBC Thrives On Changing Wealth Management Needs To Deliver Growth - The Business Times, August 24, Singapore
🇸🇬 Haru Invest Acquires Money Service Business License From U.S. FinCEN - PR Newswire, August 24, Singapore
Blogs, Webinars, Podcasts
🇬🇧 How Is Traditional Wealth Management Competing With Robo Advisory - Finextra, August 22, London
🇬🇧 Moneyfarm: The Evolution Of Digital Wealth Management - Money Marketing, August 19, London
🇬🇧 Have Robo-Advisers Had The Last Laugh? - ETF Stream, August 23, London
🇬🇧 Wealthtech App Etcho Provides Clarity On True Impact Of Investments - The Fintech Times, August 20, London
Events & Reports
🇺🇸 Wealthverse Summit - Eve Wealth, September 8, California
🇺🇸 Boston Fintech Week - Boston Fintech Week, September 27-29, Massachusetts
🇺🇸 Fintech Growth Summit - MGA, August 25-26, Florida
🇺🇸 Crypto Wealth Summit - Eaglebrook Advisors, October 10-12, Florida
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