iCapital Acquires Alts Exchange
The recent acquisition of Alts Exchange (www.altexchange.com) by iCapital (icapital.com) marks another wave of consolidation in the alternative investment industry. Just a few months earlier, SEI (www.seic.com) acquired Altigo (www.altigo.com), a cloud platform for alternative investment inventory, e-subscriptions, and reporting.
Both Alts Exchange and Altigo were once agile, efficient companies connecting mid-sized fund managers and asset allocators. Now, they're part of large, multi-billion-dollar operations, which could shift the industry landscape.
Large firms tend to focus on institutional clients, pursuing big funds and high-value opportunities. As a result, smaller and mid-sized investment managers may find themselves underserved. Many small and mid-sized sponsors avoid large providers for several reasons:
- Smaller firms prefer working with similar-sized service providers.
- Smaller funds are more cost-conscious and unwilling to overpay for distribution.
- Large asset allocators often overlook smaller investments due to the extensive due diligence, legal work, and documentation required.
In this changing environment, alternative investment custodians are stepping up. Their role is expanding to include asset performance reporting, tax document automation, and deeper integration with traditional asset management systems—all while maintaining a retail-oriented service model.
Alternative asset custodians play a key role in protecting investments from potential losses. They assist investment managers by handling subscription and core offering documents. By servicing individual investors and financial advisors, alternative investment custodians help small and mid-sized sponsors reach a wider investor audience.