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BlackRock Invests in Clarity AI: Tech Roundup

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BlackRock has made a minority investment in Clarity AI, a sustainability analytics and data science platform.

In making the investment, BlackRock joins existing investors including Deutsche Börse, Kibo Ventures, Mundi Ventures, Seaya Ventures and Founders Fund. Terms of the asset manager’s funding move were not disclosed.

Clarity AI’s capabilities will be integrated with Aladdin, BlackRock’s end-to-end operating system for investment professionals, the companies said in a joint announcement.

Clarity AI uses big data and machine learning to create actionable sustainability and impact insights and expand these to a uniquely broad universe of companies, countries and local governments.

Its proprietary technology and data science capabilities across environmental and social impact analyze more than 30,000 companies in nearly 200 countries, the companies said.

Clarity AI also supports regulatory and client reporting to help investors meet new sustainability disclosure obligations, they noted, adding that demand for sustainable investing “accelerated rapidly” last year.

Global investors in mutual funds and exchange-traded funds invested $326 billion in sustainable assets in the 12 months to November 2020, a 97% increase over the same period in the prior year, the companies said, citing third-party data.

The investment was the “latest step from BlackRock’s Aladdin platform as it continues to invest in its sustainability capabilities, which last year added 1,200 sustainability metrics and established data partnerships to help investors understand ESG and physical climate risks and opportunities,” the companies added.

BlackRock also recently unveiled Aladdin Climate, which helps investors understand and act on climate risk.

Latest Deal for iCapital

Fintech platform iCapital Network has agreed to acquire the assets of AI Insight, an alternative investment education and compliance platform, for an undisclosed amount.

AI Insight offers financial advisors investment research, training, qualification and compliance support for a wide range of alternative investments, including private capital, hedge funds, nontraded real estate investment trusts (REITs), business development companies and alternative mutual funds.

Its learning management system offers unbiased, fund-specific e-learning modules on private investment strategies to independent broker dealers and RIAs focused on expanding the scope of products available to their clients.

“The conversations between iCapital and AI Insight for this began last summer and the deal was signed on Friday,” an iCapital spokesperson said. “iCapital recognized that AI Insight’s cultural and business approach aligned with iCapital’s mission.”

“The growing interest in alternative investments and a regulatory environment expanding access to these opportunities are heightening the demand for in-depth and accessible education and compliance support,” according to Lawrence Calcano, CEO and chairman of iCapital Network.

“The acquisition of AI Insight supports our ongoing mission to equip independent advisors with comprehensive education and resources to ensure they are fully versed in the complexities of these funds and how they are best integrated in client portfolios,” he said in a statement.

Under the agreement, Sherri Cooke, CEO and president, and Jennifer Simon, chief operating officer of AI Insight, and eight additional AI Insight employees are expected to join the iCapital team.

“In reviewing opportunities to expand the services provided to our clients, iCapital was the obvious choice because, like us, they are committed to helping advisors and their clients have successful outcomes with alternative investing,” according to Cooke.

iCapital’s purchase of the AI Insight platform is the latest step in its “commitment to expand the alternative investment education suite for financial advisors,” it said.

In September, iCapital announced its acquisition of the portfolio analytics tool factorE to evaluate and manage complex portfolios that hold a mix of traditional and alternative investments. In May, iCapital Network said it was buying rival Artivest.

Foreside Tool for Breakaway RIAs

Foreside Financial Group introduced a comprehensive solution for individual advisors and groups looking to “break away” from their current affiliations and establish their own investment advisory firm.

Foreside’s Breakaway Broker Platform is a “complete solution designed to make the transition from broker to independent investment advisor straightforward and efficient,” the company said Thursday.

The new service “combines independent professional legal services for entity formation, contract drafting and review of existing employment arrangements with expert registration and compliance services to provide a complete registration experience,” it noted.

The latest tool also helps breakaway advisors and groups “mitigate any potential regulatory intervention, lawsuits, and damaged reputations by providing diligent advanced planning that is critical for a successful transition,” the firm said.

LifeYield Development

Advisors using LifeYield’s Social Security Advantage tool between Oct. 1 and Dec. 31 added an average of $148,000 per client household in potential lifetime Social Security benefits, according to the company.

In total, LifeYield’s technology helped advisors identify $11.3 billion in potential added Social Security benefits for all of 2020, it said.

LifeYield examined 17,048 anonymized reports from its largest partners in the fourth quarter to come up with the average, it said. The average reflects the difference between clients’ initial Social Security filing strategies and the optimal strategies generated by LifeYield’s Social Security Advantage tool.

“More than 90,000 advisors used our technology in 2020 to grow their businesses and improve client outcomes,” according to Harry Bartle, executive vice president of enterprise sales.

In 2020, LifeYield also significantly upgraded its API library that it said is used by firms including Allianz, Franklin Templeton, Merrill Lynch, Morgan Stanley and New York Life.