iCapital, the New York–based alternative investments platform used by more than 100,000 financial advisors, announced on Tuesday that it had started acquiring Mirador, a fintech reporting company.
Terms of the deal were not disclosed, but all of Mirador’s more than 180 employees are expected to join iCapital with equity in the firm.
iCapital chief executive officer Lawrence Calcano told RIA Intel that the acquisition is expected to close in 30 days. Mirador CEO Joseph Larizza will stay on to help grow Stamford, Connecticut–based Mirador as well as lead the transition.
iCapital was founded in 2013 with the mission to democratize alternative investments and since then has grown to service more than $180 billion in client assets. Since 2021, the company has raised close to $500 million in outside investments. It was valued at $6 billion in 2022.
Calcano said that iCapital has about $350 million in cash on its balance sheet with zero debt and “quite a lot of borrowing capacity” and had zero issues financing the acquisition.
According to Calcano, the Mirador acquisition is another step in iCapital’s road map to automate the industry, solve real customer problems, and create an end-to-end experience for advisors.
iCapital started talking with Mirador in early 2023 and pursued the acquisition in late 2023, according to Calcano and Larizza.
While iCapital partners with popular reporting software companies like Addepar, Envestnet, and others, Calcano believes the Mirador acquisition adds a complementary benefit to existing services and partnerships.
“We’re not competing with Envestnet. We’re not competing with Black Diamond,” said Calcano. “We work collaboratively with [those firms] to provide great solutions for the independent RIA community. What we’re trying to do is actually help with the data aggregation piece.”
Calcano said advisors have often struggled with data aggregation for all of their disparate investments. “It felt like we really needed to be in the data aggregation and reporting business, and when we say reporting, it’s presenting the information correctly,” he said. “But then part of reporting is making sure it goes to where you, the advisor, want to have it go.”
Larizza said one of Mirador’s strengths is being able to aggregate information from all types of asset classes, no matter the origin, and in one place. Calcano agreed and said this was one of the reasons iCapital pursued the acquisition.
“People want to see alternatives with the whole portfolio,” said Calcano. “Our products don’t and can’t ever exist in a vacuum; they have to exist in the context of all the other investments that the client might have.”
Last July, iCapital announced it had launched Architect, a portfolio construction tool that helps advisors understand the impact of allocating to alts within an existing 60/40 portfolio.
A survey by iCapital last year found that about 95 percent of advisors planned to allocate to alts in the coming year, but a survey by Cerulli Associates found that about half of advisors allocated 5 percent or less to alts despite stating that an ideal allocation was about 13 percent.
According to Calcano, about 20 percent of advisors drive 80 percent of the company’s alts business, but he said iCapital has seen an increase in allocation and advisor participation.
“Some advisors are only beginning to embrace alts and offer these products to their clients, so, right now, a lot of the flow is driven by a smaller percentage of the overall advisor pool,” said Calcano. iCapital and most distribution platforms are committed to increasing advisor participation rates, he said.
