A new fund is in the offing at iCapital that is slated to include direct investments in partnership with two private equity managers: Vista Equity Partners and Warburg Pincus.
The iCapital RF Advisor is an expansion of the investment mandate of the iCapital KKR Private Markets Fund and will offer access to direct investments via co-investment opportunities through or alongside private equity funds sponsored or managed by Vista Equity and Warburg Pincus. All three firms will make subscriptions in the existing fund alongside existing shareholders.
“The success of our strategic collaboration with iCapital has been rooted in our shared commitment to expanding access to alternatives by delivering ongoing education and product innovation for financial advisors and accredited investors,” said Todd Builione, global head of private wealth at KKR. “We look forward to continuing to provide iCapital RF Advisor with access to differentiated private equity investment opportunities across geographies and industries.”
The original iCapital KKR Private Markets Fund was launched in August 2015 and has current net assets of $575 million across nearly 400 underlying portfolio companies in buyout and growth equity investment styles as of February 28. Since the fund’s inception in August 2015 and through February 2023, the Class I shares of the Fund have annualized at 9.3% net of fees while delivering roughly half of the volatility of global equities, officials said.
Once the direct access offering is live, the name of the fund will change from iCapital KKR Private Markets Fund to iDirect Private Markets Fund.
“iCapital’s mission is to provide seamless access to private fund managers and, just as we have been doing in the qualified purchaser market for almost 10 years, we are bringing high quality managers to the accredited investor market with low investment minimums,” said Lawrence Calcano, Chairman and Chief Executive Officer of iCapital. “We’re excited to be adding Vista and Warburg Pincus to an already seasoned portfolio of KKR investments.”
For its part, iCapital has $153 billion in client assets. The new fund though will lean heavily on complimentary global exposure across buyout and growth equity investment styles managed by the $504 billion KKR, $95 billion Vista and $85 billion Warburg Pincus. The core underlying managers of the new fund invest in private companies of varying sizes of up to over $5 billion in enterprise value and diversified across numerous industries and sectors. These sectors include enterprise software, health care, industrials, financial services, consumer and business services.
The three firms have over 600 dedicated investment professionals based in 40 offices globally.
“We are excited to collaborate with iCapital, KKR and Warburg Pincus to democratize access to Vista’s differentiated and high-quality investments that provide access to one of the most important and transformative sectors in the global economy — enterprise software and technology-enabled businesses,” said Greg Myers, senior managing director, global head of Capital & Partner Solutions, Vista Equity Partners.
The fund, registered under the Investment Company Act of 1940, will be available to accredited investors with a $25,000 investment minimum, with no capital calls, simplified 1099 tax reporting and quarterly tender offers.
“Alongside KKR and Vista, we are thrilled to work with iCapital to provide access to alternatives to a broader set of high-net-worth investors,” said Greg Baecher, managing director at Warburg Pincus. “Our firm’s diversified growth portfolio is an ideal fit for this next evolution of iDirect Private Markets Fund, an innovative and differentiated fund for the accredited investor market.”
