DTCC and iCapital Collaborate to Advance Private Market Infrastructure
The Depository Trust & Clearing Corporation (DTCC) and iCapital have announced a collaboration to advance infrastructure for private markets. The two firms will combine DTCC’s market infrastructure, processing capabilities, and network with iCapital’s technology platform and investment workflows. Their goal is to connect data, operations, and market participants in the private investment lifecycle. DTCC has also made an investment in iCapital as part of the collaboration.
Efficiency, Scale, and Standardization
The collaboration will reduce operational friction and help wealth advisors and asset managers participate in private markets efficiently and at a grander scale. The firms want to create solutions that streamline operations, improve data quality, and support more connected workflows as portfolios include public and private investments more and more.
For wealth advisors, this could simplify how alternative investments are accessed and managed within client portfolios. For asset managers, the collaboration will provide efficient and standardized infrastructure for reaching and supporting the wealth market.
What Executives Say
DTCC CEO Frank La Salla said private markets have become an important growth area for financial services. It has created a need for infrastructure that can support their expansion. He stressed the need for the private market ecosystem to become easier to navigate and efficient to operate. He also pointed to resilience as an important factor in supporting the broader alternative investments.
iCapital Chairman and CEO Lawrence Calcano said the collaboration will build a connected and standardized private market ecosystem. He explained that the two firms will work on technologies that support the broader goals of the partnership, including blockchain-enabled distributed ledger technology (DLT) and tokenization where appropriate. According to Calcano, DTCC’s investment also adds to iCapital’s current group of investors that share its view that private market infrastructure needs to become connected, standardized, and scalable.
Alternative Investment Platforms
As an initial area of collaboration, DTCC and iCapital plan to further integrate DTCC’s Alternative Investment Product (AIP) with iCapital’s alternative investment platform. The integration will connect capabilities in transaction processing, data exchange, access, administration, and reporting. The firms expect this to create a seamless experience in the private investment lifecycle. They will also explore current and occurring technologies in the alternatives. These efforts will improve connectivity, transaction management, and efficiency.
As part of DTCC’s investment, Talia Klein, Head of Wealth & Investment Solutions at DTCC, will serve as an observer on iCapital’s Board of Directors. Klein said the rising demand for private assets is increasing the need for accessible and scalable infrastructure. She also noted that private markets have lacked some of the operational standards found in public markets. She said the collaboration will improve connectivity and streamline processes.
About DTCC
The Depository Trust & Clearing Corporation (DTCC) is a U.S.-based financial services company. It provides clearing, settlement, and information services for various securities, including equities, bonds, and derivatives. DTCC emerged from the merger of the Depository Trust Company (DTC) and the National Securities Clearing Corporation (NSCC). Both were founded in the 1970s to address the paperwork crisis in the securities industry. DTCC's primary goal is to enhance the efficiency and security of financial markets by automating and centralizing the post-trade process.
About iCapital
iCapital is a global fintech company focused on the future of investing. It serves financial advisors, wealth managers, asset managers, insurance carriers, and other industry participants. Its platform supports non-traditional investment products through iCapital Marketplace, Enterprise Solutions, Technology, and Data Services. The company also uses AI and machine learning for digital identity processes such as KYC and AML. The company serves nearly 3,900 wealth management firms and 144,000 active financial professionals.
Wrapping Up
The DTCC and iCapital collaboration fuses market infrastructure and private investment technology. The firms will initially integrate their alternative investment capabilities and explore technologies to improve connectivity, transaction management, and efficiency.
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