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The source for navigating the world of alternative investments
The interest in artificial intelligence (AI) seems to be increasing every day. The largest companies in the world are pouring billions into technology and talent—suggesting massive changes are coming.1
Not only is the technology rapidly advancing, but so is its relevancy for investors. The largest venture capital and private equity firms are making massive bets on AI technology and infrastructure. And as we’ve seen from the past several technology cycles, an increasing amount of value creation happening while the next-gen (i.e., AI-native) companies are private.
More than any other strategy, manager selection is critical in venture capital. The dispersion of returns is greater in venture capital, with top-quartile firms generating substantially better performance.
To learn more about venture capital and the investment opportunities available at iCapital, please contact us by reaching out to our sales team ([email protected]) or iCapital Marketplace.
Dan Vene
Co-Founder and Managing Director,
Co-Head of iCapital Solutions
CHART OF THE MONTH
Venture Capital and PE-Backed Investments in Artificial Intelligence, 2020-2025
Source: S&P Global Market Intelligence, iCapital, with data based on availability as of August 31, 2025 and is subject to change based on potential updates to source(s) database. For illustrative purposes only. Past performance is not indicative of future results. Future results are not guaranteed.
Note 2025 data is comprised of $94 billion in actual funding through August 2025 and $27 billion in estimated funding.
What is Venture Capital
Venture capital funds are designed to generate returns by investing in entrepreneurs and start-up businesses with the potential for high growth and significant value creation. It is the riskiest strategy within the private equity asset class, but also the one with the greatest return potential.
Beyond 60/40
Venture Capital Outlook with Stepstone Group
What are the challenges and potential improvements within venture capital in today’s market? John Wuestling, Partner, StepStone Group, joins Beyond 60/40 with Eileen Duff.
New from iCapital
Why Allocate to Alts
iCapital breaks down the essentials of alternative investing—covering the major asset classes like Private Equity, Private Credit, Real Assets, and Hedge Funds. Learn how these strategies can offer diversification, income potential, and inflation protection beyond traditional stocks and bonds. Whether you’re new to investing or looking to expand your horizons, this is your go-to guide for understanding the power of alternatives.
Five Simple Ways Model Portfolios Can Grow Your Alts Business
Financial advisors often face a common issue: finding an effective way to deliver alternative investment offerings. Model portfolios can serve as a straightforward solution to this problem, minimizing operational disruptions.
Market Pulse
As AI Disrupts, Not All Software Is Created Equal
Software has become a topic of debate in markets this year, driven by concerns that AI may disrupt current enterprise software companies pricing models, erode competitive moats, and lead to a “fast fashion” era of rapid commoditization. These concerns would fundamentally challenge software’s core strengths – recurring revenue, sticky adoption, and defensible moats – ultimately having meaningful implications for investors.
MONTHLY MARKET ROUNDUP
2025: The State of Consumer AI
Based on a survey of 5,000+ Americans, Menlo Ventures’ 2025 Consumer AI Report maps the stark reality of AI’s mainstream moment: 1.8 billion people worldwide are using AI tools, yet only 3% pay for them—a $12B market sitting on the edge of explosive monetization. The data exposes where general AI assistants fail and where specialized solutions in healthcare, family management, and personal finance could capture the massive gap between adoption and revenue.
Stop asking about discounts: Why asset quality drives venture secondary returns
This whitepaper challenges the conventional wisdom that discounts drive returns in venture secondaries, arguing instead that asset quality and concentrated exposure to top-performing companies are the true performance drivers. By analyzing portfolio data and market trends, it makes a compelling case for prioritizing elite company access over bargain hunting.
Agentic AI Is Here – What Investors Need to Know
The Agentic AI Chartbook explores what investors need to know about the next wave of artificial intelligence. Drawing on market research and Vista’s perspective, it highlights key applications, investment implications, and the traits of companies best positioned to capture this emerging opportunity.
IN CASE YOU MISSED IT
Investment Essentials: Early-Stage Venture Capital
Early-stage venture capital includes investments in companies to fund product development, build the employee base or implement customer acquisition strategies. Given that early-stage venture companies are smaller and less mature compared to late-stage, investments can be more speculative and typically involve long holding periods. Returns in early-stage venture strategies are often based on a small number of highly successful investments that can influence returns across an entire portfolio
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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 be 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.
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