iCapital Acquires Citi Wealth’s Alternatives Feeder Platform: Another Step Toward Owning the Infrastructure of Private Markets Distribution

In a significant move that underscores the continued evolution of the alternative investments landscape, iCapital has announced the acquisition of Citi Global Alternatives, LLC, the unit advising Citi Wealth’s global alternative investment fund platform. The platform comprises over 180 funds across private equity, private credit, infrastructure, real estate, hedge funds, and venture capital, representing a substantial portion of Citi’s alternatives distribution business. 

A few highlights of the acquisition: 

• iCapital will acquire and manage the operations of Citi's alternatives feeder fund platform. 

• Citi will remain the distributor of these funds and continue to advise clients on portfolio allocations. 

• iCapital will provide a dedicated sales and service team to support Citi Wealth globally. 

• The transaction is expected to close by the end of Q2 2025. Financial terms were not disclosed. 

For Citi, this transaction is a strategic simplification. Under CEO Jane Fraser, the bank is streamlining its wealth management operations to focus on client-facing activities while outsourcing operational complexity.  

For iCapital, it’s business as usual, but with increasing scale. This acquisition marks iCapital’s 14th feeder fund platform acquisition and its 23rd overall transaction. Previous deals with Wells Fargo, Bank of America, and UBS have solidified iCapital’s position as the de facto back-office for alternative investments distribution across major wealth managers. 

This deal exemplifies one of the WealthTech Strategy Themes of the Decade: The Rise of Alternatives. It speaks to the industrialization of private markets distribution in wealth management. Wealth managers want to offer sophisticated alternative products to their high-net-worth clients but are wary of the operational burdens that accompany the added service.  Compliance, onboarding, reporting, and fund administration are resource intensive. 

iCapital’s value proposition is clear: automate the middle and back office, reduce costs, and scale access. By owning the infrastructure, iCapital not only captures the operational side of alternatives distribution but also strengthens its position as a gatekeeper between asset managers and wealth channels. 

At WealthTech Strategy Partners, we see iCapital’s latest acquisition as yet another proof point for a larger shift in the wealth management industry’s approach to alternative investments. 

Several key dynamics are driving this trend: 

• Over the past year, a wave of firms have launched alternative investment platforms aimed at retail and mass affluent investors. What was once the domain of institutions and ultra-high-net-worth individuals is now being democratized. 

• Financial advisors are increasingly leveraging alternative investments to offer differentiated value propositions beyond traditional portfolios of stocks and bonds. 

• Despite the demand, challenges remain. Transparency, liquidity, investor education, research, and onboarding hurdles continue to be pain points that hinder broader adoption. 

• Efforts to scale alternatives for retail investors were attempted in the late 2000s but failed to gain traction. However, with institutional demand for alternatives slowing, managers are highly motivated to find a way to access the wealth channel. 

Firms like Orion, LPL Financial, SEI, Addepar, Apex Clearing, Franklin Templeton, and BNY Mellon are all investing heavily in this space, signaling a broad industry acknowledgment of alternatives as a core pillar of wealth management going forward. 

iCapital’s Citi acquisition is not an isolated event. It reflects a broader ecosystem shift where WealthTech platforms are becoming the backbone of alternatives distribution, solving longstanding operational bottlenecks and enabling advisors to meet growing client demand for access to private markets. 

As this trend accelerates, we believe partnerships between large financial institutions and nimble, tech-forward platforms like iCapital will be critical in defining the next era of wealth management. 

For more information on the Rise of Alternatives and the other WealthTech Strategy Themes of the Decade, click here. 

[Link to Press Release]