In its third acquisition of the past 12 months, iCapital announced Thursday that it entered into a definitive agreement to acquire wealthtech firm Parallel Markets. The deal is expected to close by the end of this month.
Parallel Markets specializes in reusable financial identity and offers a scalable, end-to-end solution for financial services firms to conduct investor onboarding, verification and monitoring.
As part of the transaction, iCapital will introduce what it described as a “first-of-its-kind reusable” know your customer (KYC) and anti-money laundering (AML) passport technology for alternative investments that it said was designed to eliminate duplicative investor profiles and compliance checks, saving time and resources.
Integrating Parallel Markets’ technology with iCapital’s onboarding and compliance monitoring processes will offer fund managers and wealth advisors a “more seamless user journey within the iCapital ecosystem while ensuring compliance in a constantly evolving regulatory landscape,” according to iCapital, which had $214 billion in global platform assets as of Dec. 31.
A new iCapital Investor Passport will offer turnkey onboarding for fund investors – institutional and wealth management – creating a universal reusable investor identity that the firm said can be used on iCapital Marketplace and the offerings on iCapital’s platform for global alternative asset managers.
Launched in 2023, iCapital Marketplace is a platform that connects financial advisors with alternative investment opportunities offered by investment providers and asset managers.
The new digital identity will serve as a data locker to store, manage and share personal information required for fund subscription and compliance verification in private markets, according to iCapital.
That will make it easier for investors to manage and share their know your business (KYB) and KYC data, and also help fund managers scale more efficiently and support consistency in compliance, including AML.
In prior acquisitions by iCapital that the firm said enhanced its tech capabilities, it announced acquisitions of AltExchange in October and Mirador in April.
Welcoming the Parallel Markets team to iCapital, Lawrence Calcano, iCapital CEO and Chairman, said: “Onboarding and verifying digital investor identity and compliance is a major friction point in private markets investing.”
But, he said, “Parallel Markets has pioneered software that supports a reusable investor passport, streamlining these duplicative processes for advisors, investors, and fund managers. As we continue to evolve our tech stack, we will enhance automated entry for alternative investing and leverage AI and machine learning to offer a complete, intuitive end-to-end solution.”
“We built an industry-leading onboarding and KYC/AML Passport solution for financial institutions who are looking to streamline and scale their business by eliminating redundant processes,” according to Tony Peccatiello, CEO and Co-Founder of Parallel Markets, who will join iCapital as part of the acquisition.
“As of today, we have focused on fund managers and the broader private wealth channel which is an increasingly important focus for leading financial institutions,” Peccatiello said. “We are thrilled to join iCapital and together provide an innovative, tech-enabled identity management service that powers further integration between asset and wealth managers in a seamless experience.”
Jeff Berman, Contributing Editor and Reporter at Wealth Solutions Report, can be reached at jeff.berman@wealthsolutionsreport.com.
