Blackstone, the nation’s largest alternative investment firm, has invested in the latest financing round for iCapital Network, a leading technology platform designed to bring alternatives to a broader audience of investors.

Blackstone joins a consortium of other big players including BlackRock, BNY Mellon, Credit Suisse, Morgan Stanley and UBS Financial Services as investors aligned with iCapital. Before the latest round of financing, BlackRock was believed to be the largest single investor in iCapital.

Still, the Blackstone investment is viewed as a major validation of iCapital’s model and technology. While iCapital’s platform technology is increasingly seen as the industry leader, Blackstone has pioneered several new investment structures in the sector and holds a dominant share of the fastest-growing markets.

For example, after the controversial non-traded REIT business nearly collapsed following the bankruptcy of Nick Schorsch’s Realty Capital Trust, Blackstone created a new form of investor-friendly, private REITs with significantly lower fees and daily or monthly liquidity.

Other asset management firms like Griffin Capital, Nuveen Investments and Starwood Capital have followed Blackstone into the market, sometimes called the NAV REIT world. But Blackstone reportedly is still capturing more than 60 percent of all new asset flows into private REITs offering daily or monthly liquidity.

The value proposition of iCapital is that it offers a curated menu of hedge funds, private equity and credit funds at lower minimums after conducting its own research on these investment vehicles. Many of these investments had been only available to institutions and ultra-high-net-worth individuals.

As of June 30, iCapital serviced more than $6 billion in invested capital across more than 14,000 underlying accounts.

"We're honored to have Blackstone as a shareholder, adding to the list a global leader in alternative investing, supporting our efforts to deliver the definitive technology solution for alternative investments," said Lawrence Calcano, chief executive officer of iCapital Network. “Increasingly, we are seeing a melding of two worlds: finance and technology. With the rise of fintech, the financial services industry is being transformed. We are particularly excited to be at the forefront of that opportunity for the alternative investments sector.” 

Blackstone initially earned a reputation as a shrewd investor in good businesses with problematic balance sheets. Since the financial crisis it has expanded into numerous other areas and become the largest owner of real estate in America.

“Blackstone invests in companies that develop innovative technologies to solve real-world problems, and iCapital has quickly built a reputation for its ability to drive efficiencies into one of the most challenging areas of the wealth advisory business,” said Joan Solotar, senior managing director and head of private wealth solutions at Blackstone. “There is an established and growing need for alternatives in well-constructed investment portfolios, and we want to lead that shift with a better user experience and, ultimately, better outcomes for all of our clients.”