Bank of Singapore, the private banking arm of OCBC, has collaborated with global fintech firm iCapital to launch an alternative investment digital platform, FIM Alternatives Select, for the bank’s financial intermediary partners, who are also independent asset managers.
The initiative helps the bank in its ambition to grow its financial intermediaries, family office, and wealth advisory (FFWA) assets under management by 50% by 2026.
ICapital connects wealth managers and their advisers and clients to hedge funds, private equity firms and other alternative asset managers via its technology platform. As of September 2024, assets invested through iCapital’s platform have surpassed US$200 billion.
The platform provides access to over 1,600 funds from over 600 asset managers. Leading global alternatives managers are among those who distribute their funds via iCapital’s platforms.
Economies of scale
In Asia, asset managers and investment solution platforms such as iCapital provide alternative investment solutions to financial intermediaries as well as high-net-worth and ultra-high-net-worth individuals through private banks. By doing so, they benefit from economies of scale in terms of reach and efficiency. Typically, private banks market two to six alternative funds annually.
For a start, close to 30 funds will be made available from asset managers such as KKR, The Caryle Group and Apollo via FIM Alternatives Select, with more funds to be added going forward.
Bank of Singapore is the first private bank in Asia to provide a platform of this scale for financial intermediaries. These funds span across a broad spectrum of investment strategies, structures, sectors and geographies, allowing its financial intermediary partners and their clients to better express their diverse investment views and requirements.
FIM Alternatives Select will also equip the bank’s financial intermediary partners with due diligence reports and tools, provided by iCapital, to evaluate and access a carefully curated range of alternative investment opportunities via the digital platform.
This empowers financial intermediaries to offer holistic recommendations and build diversified investment portfolios that include alternative assets across private equity, private credit, real assets and hedge funds to better meet their clients’ investment objectives.
At the same time, the platform provides access to post-investment tools such as fund reports and performance updates for financial intermediaries to monitor their positions.
Portfolio diversification
Interest in alternative investments is on the rise as investors look to diversify their portfolios, mitigate risk and deliver more consistent income and returns. According to private capital database provider Preqin, the global alternatives industry is poised to exceed US$30 trillion in assets under management by 2030, up from US$16.8 trillion at the end of 2023.
Bank of Singapore itself has seen a strong momentum in alternative investments. As of September 2024, the financial intermediary segment recorded a close to 30% year-on-year growth in invested assets.
The financial intermediary segment is one of the fastest-growing segments in Bank of Singapore. Assets under management for the bank’s financial intermediary clients grew at a compounded annual growth rate of about 20% in the 2019-2023 period. FIM Alternatives Select is the latest in a series of efforts to sharpen the bank’s value proposition to this client segment.
“Geopolitical tensions are expected to continue and create more volatile market conditions. Investors need to be nimble in accessing the whole spectrum of solutions available, including alternative investments which can potentially diversify investment risks,” says Vivienne Chia, global head, investment solutions group, Bank of Singapore. “With FIM Alternatives Select, we are making it easier for financial intermediaries to augment the strength of their client portfolios with alternative investment opportunities and achieve their wealth objectives.”
