As investors increasingly seek the diversification benefits of alternative investments, financial advisors must be equipped with streamlined, outcome-oriented tools to gain meaningful exposure to alternative investments. Rather than selecting individual funds with varying goals and risk profiles, many advisors are turning to integrated, professionally constructed solutions that deliver scale and efficiency.
In 2024, iCapital launched a suite of alternatives-only model portfolios designed to meet this demand. These strategies function much like traditional mutual fund and ETF models that have gained traction in the private wealth space. By combining curated access to top-tier managers with strategic asset allocation and ongoing monitoring, these portfolios are positioned to help expand the adoption of alternatives across the wealth management channels.
Through iCapital’s platform, advisors gain access to model portfolios that simplify implementation, offer built-in diversification, and provide ongoing insights and support. These tools address common challenges and span the full alternative investment lifecycle—from discovery to rebalancing. Whether seeking long-term capital appreciation, income, or tailored client solutions, model portfolios help bridge the gap between traditional portfolios and more modern, diversified allocations.
Five Benefits of Leveraging Model Portfolios for Alternatives
1. Simplicity
Model portfolios offer a convenient, transparent way to access alternative strategies managed by leading investment firms. The strategies are selected and overseen by iCapital’s in-house research team, helping advisors sift through the vast array of alternative investments with an outcome-based approach. Instead of navigating dozens of individual offerings and building custom allocations from scratch, advisors can focus more time on deepening client relationships and growing their practice.
2. Portfolio Construction
These portfolios are built using a disciplined, academically grounded selection process. Asset class and fund-level diversification constraints are applied to help mitigate concentration risk, with each position chosen to add meaningfully to the overall profile. Advisors can also use iCapital Architect, a portfolio analysis tool that visualizes the potential benefits of including alternatives—offering insight into performance, risk, and client-aligned outcomes.
3. Reporting, Monitoring, and Rebalancing
Ongoing oversight is provided by a dedicated research team that delivers monthly performance updates, quarterly market commentary, and annual rebalancing. This reduces the time advisors spend on data aggregation and analysis, enabling them to focus on higher-impact activities while still maintaining transparency and discipline in portfolio management.
4. Operational Efficiency
Technology plays a critical role. iCapital’s proprietary multi-investment workflow (MIW) tool streamlines the investment process by consolidating documentation, pre-populating investor information, and enabling one-click execution across all portfolio components. This ensures trades are processed securely and efficiently, making it easier to scale alternatives across a broader client base.
5. Cost
There are no additional platform fees for advisors or clients using these model portfolios. Investors pay only the fees of the underlying component funds—just as they would if investing in them individually.1 This cost-neutral structure helps drive adoption by eliminating barriers to entry while preserving value.
As the demand for alternative investments continues to grow, financial advisors are increasingly incorporating them as core components of their client portfolios. With robust tools, research support, and platform integration, advisors now have the means to bring alternatives to a wider audience—helping clients pursue goals of growth, income, and enhanced diversification.
To learn more about iCapital’s model portfolio offerings and how they can support your alternatives practice, visit iCapital.com/model-portfolios.
- iCapital Markets LLC and/or its affiliates may receive additional compensation for distribution services for sales of alternative investments included in the iCapital Model Portfolios.
IMPORTANT INFORMATION
The iCapital model portfolios are made available for institutional use only by, iCapital Advisors, LLC (“iCapital Advisors”), an SEC-registered investment adviser that advises certain private investment funds available on the iCapital Platform (“Access Funds”) and provides other advisory services, and iCapital Markets LLC (“iCapital Markets”), a registered broker dealer that distributes the financial products included within the model portfolios. iCapital Advisors, iCapital Markets, Institutional Capital Network, Inc., and iCapital, Inc. are affiliates and are collectively referred to as, together with their affiliates, “iCapital.” The iCapital model portfolios themselves are not funds.
The iCapital model portfolios are provided for informational and educational purposes only and are subject to change. The iCapital model portfolios are not to be construed as a recommendation or an offer or solicitation to buy or sell any security, financial product or instrument, or otherwise to participate in any particular trading strategy. The information is not intended as, and shall not constitute, investment, tax, accounting, or legal advice and is not a recommendation about managing or investing your client’s portfolio or retirement savings; the user should consult his or her personal investment, accounting, tax and legal advisors to understand the implications of any investment specific to any personal
financial situation.
The iCapital model portfolios do not constitute research, are not personalized investment advice. Any alternative investment used in the model portfolio shall be selected by iCapital Advisors, LLC in its sole discretion and is subject to change without notice. The iCapital model portfolios may not be appropriate for all investors, as appropriate investment strategies depend upon the client’s investment objectives. The iCapital model portfolios are not intended to meet the investment objectives or needs of specific individuals or accounts, and it is not intended for individual investor distribution. iCapital is not responsible for determining the appropriateness or suitability of the iCapital model portfolios, or any of the financial products included therein, for any client of a financial professional. Financial professionals and users of the iCapital Platform have the sole responsibility for making their own independent judgement on how to use the iCapital model portfolios and whether an investment is suitable for, or in the best interests of, a client. iCapital is not an adviser to any person who receives information on any of the iCapital model portfolios, and does not have investment discretion over, or place trade orders for, any portfolios or accounts derived from the iCapital model portfolios.
The information and analysis are hypothetical and summary in nature. Certain performance displayed uses hypothetical or simulated performance results that have many inherent limitations, and no representation is being made that any investment account will or is likely to achieve returns similar to those presented. Such hypothetical or simulated performance was not actually achieved by any financial professional or investment portfolio and may not be achieved in the future, and certain performance presented may represent hypothetical performance returns extrapolated for prior periods during which a given asset did not exist or was not investable. Numerous factors, such as the use of assumptions and historical market returns and data, make calculations and analysis uncertain, and there are frequently sharp differences between hypothetical performance results and the actual results achieved by any particular investment program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight or may otherwise reflect a hindsight bias. In addition, hypothetical investments do not involve actual financial risk or the effect that material economic and market factors would have had on actual investment decisions, and no hypothetical investment record can completely account for the impact of actual financial risk in actual investments, such as the ability to withstand losses or adhere to a particular investment program in spite of losses, which can adversely affect actual investment results. There are numerous other factors related to the markets in general or to the implementation of any specific investment program in particular which cannot be fully accounted for in the preparation of hypothetical performance results – all of which can adversely affect actual investment results, and none of which are accounted for in the performance displayed or their resulting data. Performance used or displayed for the purposes of analysis does not account for factors that would impact actual investments, such as the reinvestment of dividends or the deduction of expenses and fees that would be incurred in the management or trading of portfolio assets, including, but not limited to, account fees, custody, trading, brokerage, advisory fees or commissions, as applicable – all of which would reduce performance returns of actual investments. Due to a wide variety of risks and uncertainties, information concerning the iCapital model portfolios, including holdings, performance, and rebalancing, may vary materially from any portfolios or accounts derived from the iCapital model portfolios. Liquidity constraints in the constituents comprising the iCapital model portfolios would also prevent an actual investment program from rebalancing in the same manner as an iCapital model portfolio, which would have a material impact on performance. Past, projected, targeted, or hypothetical performance is not indicative of future results, and there is no guarantee that the iCapital model portfolios or any investment strategy will be successful or achieve any particular level of results, or that substantial or complete losses will be avoided in respect of actual investments.
When selecting an alternative investment for inclusion in an iCapital model portfolio, iCapital selects from a limited universe of alternative investments, without considering or canvassing the universe of alternative investments that could be used in the model portfolio. iCapital only considers alternative investments available to sub-accredited investors, accredited investors, and qualified clients for which an iCapital affiliate serves as investment adviser and/or for which an iCapital affiliate receives compensation for distribution and other services, and which are approved on the major custodial platforms. iCapital has an incentive to select alternative investments for which it receives higher fees and iCapital generally receives higher fees when an affiliate serves as investment adviser or it provides distribution services. iCapital Registered Fund Adviser LLC, an affiliate of Institutional Capital Network, Inc., serves as the investment adviser to iDirect Private Markets Fund (iDPE). iCapital and its affiliates receive compensation for managing iDPE, and as a result, has an incentive to present these funds in a favorable light and include in the iCapital model portfolio. Other products and alternative investments may be more suitable for a client and may provide the same or greater returns with less risk and/or lower fees, or other favorable terms, relative to the alternative investments included in the model portfolio. The sponsor, general partner, investment adviser (or equivalent) of alternative investments included in the iCapital model portfolios, the underlying fund, and/or the underlying fund’s affiliates (the “Sponsor”), and/or an investor’s broker-dealer or registered investment adviser or their affiliates (such investor’s “RIA”), together with their subsidiaries, may own a passive minority share of the outstanding equity securities of Institutional Capital Network, Inc., which wholly owns the investment adviser iCapital Advisors The existence of any such relationship creates potential conflicts of interest. For instance, due to a Sponsor’s or RIA’s ownership interest in iCapital, iCapital may be more willing to select such Sponsor’s alternative investments for inclusion in an iCapital Model Portfolio than alternative investments controlled by other sponsors or for clients of other RIAs.
iCapital model portfolios have not been reviewed or approved by, and have not been adopted, sponsored or endorsed by, the sponsor or issuer of any financial instrument that is made available on the iCapital platform. Alternative investments are considered complex products, involve risk and are only suitable for highly sophisticated investors who are willing and prepared to bear the associated risk, including the risk of total loss of
their investments.
Before investing in any alternative investment comprising part of the iCapital model portfolios, investors should review the prospectus or other offering documents, which contain important information, including the product’s investment objectives or goals, its strategies for achieving those goals, the principal risks of investing in the product, the product’s fees and expenses, and its past performance.
ALTERNATIVE INVESTMENTS ARE CONSIDERED COMPLEX PRODUCTS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. Prospective investors should be aware that an investment in an alternative investment is speculative and involves a high degree of risk. Alternative Investments often engage in leveraging and other speculative investment practices that may increase the risk of investment loss; can be highly illiquid; may not required to provide periodic pricing or valuation information to investors; may involve complex tax structures and delays in distributing important tax information; are not subject to the same regulatory requirements as mutual funds; and often charge high fees. There is no guarantee that an alternative investment will implement its investment strategy and/or achieve its objectives, generate profits, or avoid loss. An investment should only be considered by sophisticated investors who can afford to lose all or a substantial amount of their investment. iCapital makes no representation or warranty regarding the accuracy or completeness of the information herein. The information contained herein is subject to change, incomplete, and may include information and/or data obtained from third party sources that iCapital believes, but does not guarantee, to be accurate. iCapital considers this third-party data reliable, but does not represent that it is accurate, complete and/or up to date, and it should not be relied on as such. iCapital makes no representation as to the accuracy or completeness of this material and accepts no liability for losses arising from the use of the material presented.
Securities products and services are offered through iCapital Markets LLC, a registered broker dealer, member of FINRA and SIPC. iCapital Advisors, LLC is registered with the SEC as an investment adviser. iCapital Markets LLC and iCapital Advisors, LLC are affiliates of Institutional Capital Network, Inc., and iCapital, Inc. iCapital and iCapital Network are registered trademarks of Institutional Capital Network, Inc. Please visit icapital.com for complete disclosures, including terms of use and privacy policy.
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