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iCapital Network to acquire Bank of America alternatives feeder fund operations

Tuesday, September 18, 2018
Opalesque Industry Update - iCapital Network, the financial technology platform democratizing alternative investments for high-net-worth individuals and their advisors, today announced it has entered into a definitive purchase agreement to acquire certain subsidiaries from Bank of America (NYSE: BAC) that provide sponsorship, administration and advisory services to alternative investment feeder funds (AI feeder funds).

Bank of America's AI feeder fund operations businesses represent approximately $20 billion in client assets. Upon closing, iCapital's end-to-end technology solution will be leveraged to streamline and automate ongoing operations and fund administration services for the funds and provide support to advisors and investors.

"Bank of America is one of the largest providers of alternative investments and its portfolio of AI feeder funds is a natural complement to our existing footprint," said Lawrence Calcano, Chief Executive Officer of iCapital Network. "This transaction brings us one step closer to our vision of using technology to create a standard industry architecture for alternative investments that improves the experience for investors, advisors and asset managers."

Bank of America's Investment Solutions Group will continue to source, distribute and monitor AI feeder funds on its platform, while providing ongoing guidance on the role of alternative investments within a diversified investment strategy. Investors in these funds will continue to be clients of Merrill Lynch and U.S. Trust and the funds will continue to be distributed through Merrill Lynch and U.S. Trust channels.

"Alternative investments are an important component of well diversified client portfolios, and we remain committed to providing clients with access to a broad range of third-party offerings on our platform," said Nancy Fahmy, Head of Alternative Investments and Specialty Asset Management for Bank of America. "We selected iCapital based on its strong commitment to feeder fund administration, technology advancement and client service. This transaction will help simplify our operations, and we will work closely with them to ensure our advisors and clients continue to receive exemplary service."

As part of the transaction, iCapital will offer positions to 22 Bank of America employees who currently support AI feeder fund operations businesses, and the transitioning team will continue to support the fund portfolio to ensure continuity of service.

"Bank of America's team will add significant strength to iCapital's operations department along with critical industry experience at an important stage in our company's growth. The combined horsepower of our two organizations will greatly benefit all of our clients and partners," said Tom Fortin, Chief Operating Officer of iCapital Network. "At the close, our platform will service more than $25 billion in invested capital and nearly 70,000 accounts, which can only be accomplished with the scaling power of iCapital's technology."

The transaction is expected to close during the first half of 2019. Terms of the agreement were not disclosed.

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