Review of Iconiq Capital

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Updated on Friday, April 10, 2020

Iconiq Capital, LLC is an investment advisory firm based in San Francisco that focuses on providing services mainly to high net worth individuals and organizations. The private capital firm, which has about 260 employees on staff, offers boutique services that focus on venture capital, technology growth, real estate and market buyouts. It currently has $42.5 billion in assets under management (AUM).

All information included in this profile is accurate as of April 10, 2020. For more information, please consult Iconic Capital’s website.

Assets under management: $42,457,958,000
Minimum investment: $10,000
Fee structure: Either a flat fee or a percentage of AUM, up to 1.50%, for advisory services; performance-based fees
Headquarters: 394 Pacific Avenue
2nd Floor
San Francisco, CA 94111
(415) 967-7763

Overview of Iconiq Capital

Iconiq Capital is privately held and has a number of affiliates and fund families associated with it. Founded in 2011, Iconiq Capital is known for working with influential families and organizations around the world, including Facebook mogul Mark Zuckerberg.

Currently, the firm employs about 260 people, about 98 of whom perform investment advisory functions. In addition to its headquarters in San Francisco, Iconiq also has offices in the U.S. in New York City and Palo Alto, Calif., as well as in Singapore.

Which types of clients does Iconiq Capital serve?

Iconiq Capital almost exclusively works with high net worth individuals and organizations. It is capable of serving the following client types:

  • High net worth individuals
  • Family offices
  • Trusts
  • Estates
  • Charities
  • Corporations
  • Private pooled investment vehicles

In general, the firm’s clients have a net worth of at least $25 million, although there are some who are below that threshold. To invest in a private fund, clients must invest at least $10,000 and be an accredited investor, defined by the Securities and Exchange Commission as someone with an earned income of at least $200,000 (or $300,000 with a spouse) per year for the last two years or who has a net worth of at least $1 million.

Services offered by Iconiq Capital

As a boutique firm with exclusive clientele, the services offered by Iconiq Capital are tailored to meet the needs of these clients. Many of the services offered by Iconiq Capital are designed to help individuals manage their wealth more effectively and take advantage of various opportunities that might not be available to the general public.

Some of the services offered by Iconiq Capital include:

  • Investment policy development, including establishing parameters and restrictions
  • Asset allocation advice
  • Performance evaluation of accounts and portfolios
  • Selection of portfolio managers, Iconiq private funds and external funds
  • Asset management
  • Tailored investment advice

In addition to these services, Iconiq Capital also serves as the sole investment advisor to the Iconiq Private Funds, which certain qualified investors are allowed to invest in.

How Iconiq Capital invests your money

Iconiq Capital mostly provides non-discretionary services, meaning that, for the most part, clients have to approve trades and portfolio changes. However, there is also the option to allow Iconiq to trade at its discretion or to set up an agreement that includes limited discretion.

When analyzing your accounts and portfolios to make recommendations and changes, Iconiq might use a variety of methods, including using charts, as well as fundamental, technical and cyclical analysis. All of these types of analysis take into account different aspects of stocks, such as company management, prices and trends.

On top of that, common investment strategies include making long- and short-term securities purchases, trading and making margin transactions. Iconiq is also involved in writing options, including potentially risky strategies like uncovered options.

When building client portfolios, Iconiq focuses more on overall asset allocation — or how your portfolio is divided up between different types of investments — rather than on individual securities. While Iconiq doesn’t have preset portfolio strategies to choose from, it does offer a number of private investment funds of its own making, as well as access to various opportunities that might be considered nontraditional. These include technology growth equity, venture capital and middle-market buyout, as well as real estate.

Fees Iconiq Capital charges for its services

Advisory services fees: Iconiq Capital doesn’t have a set fee schedule for its advisory services. Some clients pay flat fees for certain services, which are negotiated on a client-by-client basis. In general, though, advisory clients can expect to pay an annual fee based on a percentage of assets under management. This fee is also negotiated on an individual client basis, though it is capped at 1.50% of assets under management.

Other fees: Clients may also pay other fees, such as portfolio management fees and non-advisory service fees. In order to see your total investing costs, it’s important to read through the agreement.

Performance-based fees: Additionally, the firm may charge performance-based fees, depending on the type of affiliate used, especially if a certain private fund family is used. These fees include an additional “carry.” For example, when an investment series under the ICQ Investments family is distributed, a manager might receive up to a 20% carry in addition to the on-going management fee. However, this only comes into play when the investment in private equity or a hedge fund is paid out.

For those investing in ICONIQ Strategic Partners, though, the annual management fee might be up to 2%, and the carry up to 30% for profit distribution. It’s an arrangement that is related to the type of private equity investments that you’d get access to through Iconiq Capital.

Bundling of fees: There is no wrap fee program offered by Iconiq Capital. However, some of the portfolio managers affiliated with the company might choose to participate in a wrap fee program, and some services might be bundled.

Iconiq Capital’s highlights

  • Personal attention: Because this is a boutique firm, you’ll get personal attention with your investments. A portfolio manager will talk to you about specific goals and create an investing plan designed to meet your needs.
  • Access to private equity: If you’re interested in private equity, or other exclusive investments, Iconiq Capital can help out. You can get access to specially made hedge funds, startups and other investments that are unique and not commonly offered.
  • No disciplinary disclosures: Even though the firm deals with complex investments, it doesn’t have any disciplinary disclosures that it’s required to report in its SEC filing. See more on this below.

Iconiq Capital’s downsides

  • Steep requirements to access Iconiq’s funds: You need to invest at least $10,000 and be an accredited investor to access one of Iconiq’s funds. This requires a certain level of sophistication as an investor.
  • Preference for high net worth investors: Iconiq Capital’s clients usually have a net worth of at least $25 million and many are highly influential families and organizations. This means Iconiq Capital likely won’t be a suitable choice for most investors.
  • Performance-based fees: Iconiq Capital charges performance-based fees, which can drive up the cost of investing. On top of that, in the interest of trying to boost income, some managers might take additional risks.

Iconiq Capital disciplinary disclosures

Because Iconiq is registered with the SEC, it is required to disclose material facts about legal action and disciplinary events against the firm and its affiliates in its Form ADV, paperwork filed with the SEC. At this time, Iconiq Capital has no disclosable disciplinary actions to report.

Iconiq Capital onboarding process

To start working with Iconiq Capital, you need to contact the firm using the email address provided on its website. Iconiq Capital usually leans toward those with a high net worth.

The firm will then analyze your portfolio and goals to help you come up with an investment policy for your accounts, as well as decisions regarding which types of investments you want to make. After your account is established, it will be reviewed periodically, based on the nature of your portfolio and your own preferences. Additionally, when major economic or market events are in process, an additional review might be instigated.

Is Iconiq Capital right for you?

For the most part, unless you have a net worth of $25 million, Iconiq Capital is unlikely to work for you. To access the firm’s funds, you must invest at least $10,000 and be an accredited investor. Its services are also largely geared toward the wealthy.

If you fall within this investor group, however, Iconiq Capital focuses heavily on private equity investments and also includes real estate opportunities and leveraged buyouts. These are unique offerings that you might not have access to in the general run of investing.

Before making a decision, though, it’s important to do your research, ask advisors questions and compare your options to ensure you find the right advisor for you.

The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.