Iconiq Capital doubles its New York City footprint to reflect spike in hiring and new clients, but AUA has been stuck around $80 billion for past two years

The RIA that once managed Mark Zuckerberg's wealth and counts as clients some of Silicon Valley's richest investors, has significantly boosted its New York City presence in what is being described as a  “hush-hush” transaction.

Iconiq Capital has doubled its New York City footprint just 17 months after it doubled the size of its San Francisco headquarters. Iconiq has also kicked up its headcount by 50% in the last 25 months.

The deal is puzzling given the value of assets it manages or administers seems stalled, according to its latest federal ADV filing. 

In Manhattan's closely watched real estate market, the long-term deal for 70,000 square feet at 360 Park Avenue South was brokered in late October, according to commercial property reports. It was described as “hush-hush,” by one local report. 

The vintage, Class-B property built in 1913 just underwent a $100-million renovation, and Iconiq is its first tenant. 

The address is located in Manhattan's “NoMad” neighborhood-- North and West of Madison Square Park – home to a number of Fortune 500 companies. Based on average office rents, the lease could be worth as much as $5.8 million annually.* 

At the same time, Iconiq is vacating 30,000-square-feet in an elegant, 20-story building at 15 East 26th St., directly on Madison Square Park, around the corner from its new offices.

Iconiq has a culture of media reticence and did not respond to repeated requests for comment.  

AUA down, staff up

The deal comes after Iconiq's AUA has fallen 13.3%, from $89 billion* to $77.2 billion, according to its Form ADV. In contrast, the average investment portfolio is down roughly 7.8% since Sept. 2021.

The estimate is based on a 60/40 stock-to-bond portfolio, with the S&P 500 and the Vanguard Total Return Bond Fund as benchmarks.

Iconiq's website offered an alternative $83.5 billion figure for its AUA in March 2022. Today its website lists its AUA as “over $80 billion.”

Even so, the firm now employs one-and-a-half times more staff to administer 86% of the assets under administration (AUA) in Sept. 2021. See: Iconiq Capital is now an $89-billion RIA.

It counts 452 full-time employees, up from 293 in Sept. 2021, across five offices, including 137 advisors or researchers, 113 of whom are listed in its Form ADV..

The number of staff it employs per dollar it manages has also fallen. Today, Iconiq employs one staff member for every $171 million. In 2014, it employed one staff member for every $146 million it managed.

High rollers

Despite declining AUA, Iconiq has been growing by other measures. 

In the last two years, the RIA has brought in 55 new high-net-worth (HNW) or ultra-high-net-worth (UHNW) clients, taking its total to 312. 

Average client account balances now stand at roughly $31.2 million, and a loose minimum of $25 million* is required to even get in the door.  

KKR’s Henry Kravis, TPG’s David Bonderman, Meta executive Sheryl Sandberg, Twitter co-founder Jack Dorsey and LinkedIn CEO Jeff Weiner are, or at one point were among Iconiq's clients. 

An early anchor client for Iconiq, Zuckerberg, 39, moved most of his assets out of the RIA to The Chan Zuckerberg Initiative, a philanthropy owned by the Facebook founder and his wife Priscilla Chan, according to reports.

Chasing pensions

It's also tapping a steadily growing number of charitable organizations and pooled funds.  

In Sept. 2021, Iconiq managed $4.1 billion on behalf of 45 charitable organizations, and $44.8 bilion on behalf of 204 pooled funds. Today it manages $5.7 billion, a 39% bump, on behalf of 76 charitable funds and $61.9 billion, a 38% bump, on behalf of 275 pooled funds.

It counts giant pension funds, like the Canada Pension Plan Investment Board as clients, and last year Iconiq bought a minority stake in a New York City real estate investor, Madison Realty Capital.

Membership doesn't come cheap. Iconiq charges a basic fee of 1.5%, topped up by a number of extra layered fees, including performance bonuses, asset management fees, and outsourcing costs. 

Between 2014 and Nov 2023, its AUA shot up 865% to its present $77.2 billion level. See: How the Facebook IPO is creating the mother of all RIAs, Iconiq, and what an in-your-face it is for Wall Street.

Fast friends

Zuckerberg and his Morgan Stanley stockbroker, Divesh Makan, co-founded the breakaway RIA in 2011 with Michael Anders and Chad Boeding. Unlike classic RIAs, it doubles as a venture capital and private equity shop.

The trio, who worked together at Goldman Sachs until 2008, left Morgan Stanley Smith Barney to start their own firm just before New Year 2012, taking with them a handful of analysts and advisors – and top clients. 

Will Griffith, a former partner at private equity shop TCV, joined Iconiq in 2012, co-founding its private equity arm, Iconiq Strategic Partners.

The Neuberger Berman-owned private equity investor Dyal Capital Partners snapped up a 6% stake in Iconiq in late 2020. Dyal is now part of Blue Owl Capital, following a merger with Owl Rock in May 2021.

Breakaway

Boeding left the firm somewhat acrimoniously in 2018 and founded Epiq, an RIA he positioned above Iconiq in the UHNW market.  

It administers $4.3 billion on behalf of 193 rich investors and 83 investment pools, and will not take on clients with less than $100 million of investable assets.

Following his departure, Boeding also slammed Iconiq for being heavily conflicted – Iconiq's form ADV 2 notes several conflicts – not least because it runs expensive private funds that it sells to its clients.

Iconiq has four offices in the US, including two in San Francisco, one in Palo Alto, Calif., and one in New York City. It also runs a fifth office in Singapore.

* The average rent in Park Avenue South stands at $82.43 per square foot, according to a report from Savills. 

* In its Form ADV 2, Iconiq notes that it may make exceptions to its general client minimum of $25 million, at its own discretion, even to manage the accounts of “retail” investors.