Pershing teams up with two alts platforms in a bid to broaden RIA access

The $52 billion iCapital Network and the CAIS platform are teaming up with BNY Mellon’s Pershing in order to further simplify the process for advisors accessing alternative investments. Pershing's Alternative Investments Network provides advisors with access to over 2,500 alternative investments, including non-traded REITs, hedge funds, private equity, private debt, and managed futures, from third-party platform sponsors. Moving forward, advisors will only need to pre-populate required documents -- including the Pershing Private Investment Form -- on the alternative investment platform where the product is offered. These completed, executed documents will then be automatically uploaded to the Pershing platform, eliminating the need for manual uploads and reducing the potential for human errors. Further, advisors will be able to use e-Signature on Pershing's required form as part of these integrations. Pershing is the first custodial bank to integrate via API with CAIS and the iCapital Network. Pershing has offered access to alternative investments through its Alternative Investments Network for more than 10 years, with registered investment advisor (RIA) balances on the network doubling over the past three years. Integrations with CAIS and iCapital are expected to contribute to that growth by automating document workflows between these providers and the Pershing platform. The CAIS platform provides financial advisors with a broad selection of alternative investment strategies including, hedge funds, private equity, private credit, real estate and structured notes, allowing them to capitalize on opportunities and/or withstand ever-changing markets. In June, CAIS announced more than $10 billion of transactional volume on the platform, signaling greater demand for alternative investments during the market fallout from COVID-19. Last month, iCapital surveyed RIAs, private banks, family offices and qualified purchasers, for their views on market volatility and current portfolio positioning. Half of respondents said they were more likely to consider private equity today compared with six months ago. Hedge funds also saw a boost in interest, with 34% of respondents more likely to consider hedged strategies versus six months ago. Among alternative investments, private equity, private credit, and hedged strategies are drawing the most assets among survey participants. More than 80% of respondents said they are overweighting private equity, along with cash, while more than 50% of respondents reported overweights to private credit and hedged strategies, in addition to overweights to public equities. Meanwhile, more than half of respondents reported underweight positions in bonds, real estate, and commodities. "One of the major barriers to investing in alternatives is the manual steps involved in the process," said Rob Cirrotti, managing director of global strategy and product management at BNY Mellon's Pershing. "As advisors increasingly turn to alternative investments for diversification and uncorrelated returns, we are committed to streamlining the process by making it more digital and more seamless for them so they can drive greater efficiencies." Tom Fortin, COO and managing partner of iCapital, added that the firm’s clients have found the paperless, digitally enabled aspects of the iCapital offering to be an advantage in their efforts to ensure business continuity during the pandemic. Officials at iCapital said that the newly enhanced services will include the digital transmission of Pershing private investment forms, eliminating the need for advisors to upload forms manually. E-signature and e-delivery are also integrated into the investment process that will streamline the investment process for advisors. These integrations with CAIS and iCapital are part of Pershing's ongoing efforts to deepen its capabilities in the alternative investments space and create an important bridge between RIAs and alternative investment managers as the only RIA custodian that serves both audiences. Both BNY Mellon and Pershing have a strong presence in the alternative investments space. Through its PRIME unit Pershing offers alternative investment managers securities lending, capital introductions, as well as financing solutions. BNY Mellon is a leading fund administrator and custodian of alternative investment assets across credit, hedge, private equity and real estate funds. "We have a long history of making alternative investments available to advisors on our platform," added Pershing’s Cirrotti. "We will continue to invest in solutions to meet our clients' evolving needs and leverage the broad array of alternatives capabilities across our enterprise to provide clients with unique insights."

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