Iconiq Capital Review - MagnifyMoney
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Iconiq Capital Review

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ICONIQ Capital is an investment advisory firm based in San Francisco that focuses on providing services mainly to ultra high net worth individuals and organizations. The private capital firm offers boutique services that focus on venture capital, technology growth, real estate and market buyouts. In order to invest in the firm’s funds, you must be an accredited investor and put in at least $10,000.

The bottom line: ICONIQ Capital is an investment advisory firm that caters largely to the very wealthy and boasts high-profile tech clients including Facebook’s Mark Zuckerberg and Twitter’s Jack Dorsey.

  • Most clients have a net worth of at least $25 million
  • Focuses on investments rather than traditional financial planning
  • Offers its own funds and access to private equity, among other exclusive investments

All information included in this profile is accurate as of March 25, 2022. For more information, please consult ICONIQ Capital’s website.

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Overview of ICONIQ Capital

Founded in 2011, ICONIQ Capital is known for working with influential families and organizations around the world. The firm is privately held and associated with a number of affiliates and fund families.

Currently, the firm employs close to 300 people, about 100 of whom perform investment advisory functions.

ICONIQ Capital’s pros

  • 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. The firm’s 2:1 individual client-to-advisor ratio is also very low.
  • Access to private equity and other nontraditional investments: If you’re interested in private equity, or other exclusive investments, this firm can help out. You can get access to specially made hedge funds, startups and other investments that are not commonly offered.
  • No disciplinary disclosures: The firm doesn’t have any disciplinary disclosures reported in Securities and Exchange Commission (SEC) filings. See more on this below.

ICONIQ Capital’s cons

  • Preference for high net worth investors: Although the firm says it can take on investors of any net worth, ICONIQ Capital’s clients usually have a net worth of at least $25 million and many are highly influential families and organizations. Along with its funds only being available to accredited investors, this suggests that 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.
  • Limited geographic footprint: ICONIQ Capital only has offices in two states in the U.S.: California and New York. In addition, it only has U.S. jurisdiction in California, New York, Florida and Texas. Clients outside of these states won’t be able to work with the firm.

Which types of clients does ICONIQ Capital serve?

In general, the firm’s clients have a net worth of at least $25 million. To invest in a private fund, clients must invest at least $10,000 and be an accredited investor, defined by the SEC 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. A 2020 change in the definition did also include some people with specific professional certifications, designations and credentials, which would include some investment advisors.

Services offered by ICONIQ Capital

As a boutique firm with a largely 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 the above services, ICONIQ Capital also serves as the sole investment advisor to the ICONIQ Private Funds, in which certain qualified investors are allowed to invest.

How ICONIQ Capital invests your money

ICONIQ Capital mostly provides non-discretionary services for its Managed Account clients, 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. That said, the bulk of its regulatory assets under management are discretionary.

When building client portfolios, ICONIQ focuses 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 from which to choose, the firm does offer a number of private investment funds of its own making. ICONIQ Access funds typically invest in one or more underlying funds, such as hedge funds and private equity funds.

The firm offers its clients access to various opportunities that might be considered nontraditional, such as technology growth equity, venture capital, middle-market buyout and real estate.

For Managed Account clients, ICONIQ may manage assets the clients have in their brokerage and other investment accounts, including:

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.

Performance-based and fund 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,” or performance-based fee or allocation.

For those investing in ICONIQ Private Funds, 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.

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

ICONIQ Capital disciplinary disclosures

The firm has no disclosable disciplinary actions to report. Because ICONIQ is registered with the SEC, it is required to disclose material facts about legal action and disciplinary events against the firm, its employees and its affiliates from within the last 10 years in its Form ADV, paperwork filed with the SEC.

You can read more about the firm by going to its Investment Advisor Public Disclosure (IAPD) page.

ICONIQ Capital onboarding process

To start working with the firm, you need to contact them using the email address provided on its website: information@IconiqCaptial.com.

From there, the firm will analyze your portfolio and goals to help you come up with an investment policy for your accounts, as well as make decisions regarding which types of investments you want to make.

After your account is established, it will be reviewed periodically. The frequency of such reviews will depend on a client’s portfolio and expectations. Additionally, additional reviews may happen during major economic or market events.

Where ICONIQ Capital is located

ICONIQ has three offices in the U.S. in the following cities:

  • San Francisco
  • Palo Alto, Calif.
  • New York

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 and investments are also largely geared toward the ultra wealthy, and the firm has billionaire tech moguls as clients.

If you fall within this investor group, however, ICONIQ Capital focuses 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 about working with a firm, be sure to research multiple firms 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.