Morningstar and iCapital Announce Strategic Relationship to Expand Financial Advisor Access to Alternative Investments and Insights

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CHICAGO and NEW YORKJan. 17, 2024 /PRNewswire/ — Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment insights, and iCapital, the global fintech platform empowering the asset and wealth management industry with an industry-leading alternative investment experience, today announced a strategic relationship to provide Advisor WorkstationSM users with access to alternative investments and analytics for the first time.

The integration equips Advisor Workstation’s more than 170,000 users with alternative investment research and tools to evaluate private assets side by side with traditional investments. Coupled with investment proposal and report capabilities in Advisor Workstation, the solution empowers advisors to offer holistic recommendations and build diversified portfolios that include alternative assets for clients.

“This is a game-changer for advisors who are building a modern advisory practice and serving evolving investors’ demands for diversification and personalization,” said Vimal Vel, chief product officer for Morningstar’s Enterprise group. “Advisor Workstation’s integration with iCapital is unique because it’ll be end-to-end. Advisors will be able to include alternatives alongside traditional investments in model portfolios, reports, and proposals.”

“We are enormously excited to forge this relationship with Morningstar and support expanded access to alternative investing opportunities and insights,” said Lawrence Calcano, chairman and chief executive officer at iCapital. “Our simple, intuitive technology interface ensures that Advisor Workstation users have access to both the right products for their clients and an extensive library of educational resources to make informed decisions relating to portfolio allocations and diversification strategies.”

With the recent completion of the first phase of the strategic relationship, independent advisor clients now have access – through a single interface – to both iCapital Marketplace, a platform featuring the industry’s broadest selection of alternative investment funds, due diligence and education resources, fund subscription processing, and third-party reporting services, and iCapital Architect, an innovative portfolio construction and analysis tool for financial advisors to build robust, personalized client portfolios incorporating alternatives.

Phase two, coming in the first half of 2024, will bring the integration to Advisor Workstation’s Enterprise-level clients and leverage iCapital’s analytics to generate Morningstar’s Portfolio Risk Score, a numeric score that represents the risk level of a given portfolio against the Morningstar Target Allocation Index Family, when alternatives are added to client asset allocations. Coupled with the Morningstar Risk Profiler’s risk tolerance test, Advisor Workstation can then show the range of Portfolio Risk Scores, known as the Risk Comfort range, within which each client would be most comfortable.

Demand for Alternatives is Forecasted to Increase

Advisors are responding to client needs and an uncertain market environment by offering more products – in the form of alternative assets, according to Morningstar’s Voice of the Advisor study that takes the pulse of more than 600 financial advisors and wealth managers across the U.S. The study found that advisors offering a wide variety of products to their clients say alternatives (cryptocurrency, structured products, liquid alternatives, REITs, private debt, and private equity) make up between 14% and 19% of their total assets under management.

In addition, an iCapital survey of 400 U.S. registered advisors last year found that 50% of all advisors said client interest in alternative investments has increased over the past two years. Almost all (95%) advisors surveyed say they plan to allocate the same or more to alternative investments in the coming year. Currently, advisors who use alternatives – about 36% – allocate between 5% and 15% of client portfolios to alts.

About Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment insights in North AmericaEuropeAustralia, and Asia. The Company offers an extensive line of products and services for individual investors, financial advisors, asset managers and owners, retirement plan providers and sponsors, and institutional investors in the debt and private capital markets. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, debt securities, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with approximately $264 billion in assets under advisement and management as of Sept. 30, 2023. The Company operates through wholly- or majority-owned subsidiaries in 32 countries. For more information, visit www.morningstar.com/company. Follow Morningstar on X at @MorningstarInc.

About iCapital

Founded in 2013, iCapital is the leading global fintech company powering the world’s alternative investment marketplace. iCapital has transformed how the wealth management, banking, and asset management industries facilitate access to private markets investments for their high-net-worth clients by providing intuitive, end-to-end technology and service solutions; education tools and resources; and robust diligence, compliance, and portfolio analytics capabilities. iCapital’s solutions enable organizations to streamline and scale their operational infrastructure for alternative investments and to provide access to direct investments and feeder funds at lower minimums through simplified digital workflows.

iCapital-managed platforms offer wealth advisors and their high-net-worth clients access to an extensive menu of private investments, including equity, credit, real estate, infrastructure, hedge funds, annuities, and risk-managed solutions. iCapital has been recognized on the Forbes Fintech 50 list each year from 2018 to 2023, the Forbes America’s Best Startup Employers in 2021, 2022, and 2023, and MMI/Barron’s Industry Awards as Solutions Provider of the Year in 2020, 2021, 2022, and 2023.

As of Nov. 30, 2023, iCapital services over $172 billion in global client assets, of which about $27 billion are from international investors (non-US Domestic) across more than 1,400 funds. Employing more than 1,200 people globally, iCapital is headquartered in NYC and has offices worldwide, including in ZurichLondonLisbonHong KongSingapore, and Toronto.

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Edmund Shing, PhD

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Edmund has over 29 years of experience in financial markets in a wide variety of positions, ranging from proprietary trading to portfolio manager in a number of financial institutions in London and Paris.  He previously held the role of Global Head of Equity and Derivative Strategy at BNP Paribas in London from 2015 to 2020, and has been Chief Investment Officer at BNP Paribas Wealth Management since November 2020.

Edmund is responsible for piloting our investment strategy and will continues to rollout out recommendations and themes with actionable advice that brings our expertise to our clients and support to our client-facing teams.  In this time of change, his expertise in following and anticipating markets is a true value added for both our customers and those at Wealth Management who serve them.

Edmund has a PhD in Cognitive and Computing Science from the University of Birmingham in the United Kingdom, and has done advanced studies in Knowledge-Based Systems and in Experimental Psychology.  He is an EFFAS-certified financial analyst. He has also authored the book “The Idle Investor” published by Harriman House in 2015, proposing 3 simple investment strategies that take only a few minutes to execute per month.

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