Funding and Deals across Wealth, Asset Management, and Banking Technology and Services week ending May 26th, 2023: Themes and Rationale
Deals for week ending 26th of May, 2023
Overview
Deals this week that I have picked up emphasize:
1)????Continuing interest in exposure to the evolving private debt market, and to engagement with mid-market credit. ?Buyers are continuing to acquire companies with domain expertise in both, with a strong interest in firms with leading market positions in North America and Europe.
2)????The growing maturity and consolidation that is taking place in the investible market. Vertically integrated investment companies are emerging that seek to not only own and operate in different segments of the investible market but also provide the infrastructure to support the different ways assets are bought, sold, and custodied. The rising interest in investible also reflects how traditional collectors are increasing competing with HNW individuals and family offices for exposure to asset classes that have much more liquidity than in the past and non-correlated returns
Mubadala acquiring Fortress Investments Mubadala
Rationale: This borders on an inside deal since Mubadala was already exposed as a minority investor in Fortress with Softbank holding the majority. Softbank is now divesting and Mubadala is consolidating its position as the core partner to Fortress, bringing with it, not only the exposure to other LPs as investors, but also a direct investor, who is increasing their exposure to private company credit and equity at this point.
Mizuho acquiring Greenhill & Co 瑞穗实业银行
Rationale: Greenhill brings Mizuho a whole new level of highly prized and specific corporate finance expertise that will significantly boost its profile and capabilities when it comes to advisory and restructuring work. It will also give the organizations new present in the mid and upper mid-market where there is an increasing gap developing as traditional regional credit providers pull back and restrict their credit exposure further.
Fanatics acquiring PWCC Fanatics
Rationale: Fanatics is rapidly become a franchise in all things sports, when it comes to betting, collecting memorabilia and trading collectible sports related assets, such as trading cards (real and digital). PWCC used to run its marketplace on Ebay but has over the past two years created their own marketplace and custody platform and thus Fanatics is gaining a strong starting position in one of the fastest areas of this part of the investible market.
Funding for week ending 26th of May, 2023
Overview
There were some impressive mid stage funding rounds this week for companies that have clearly spent several years demonstrating their ability to grow their client base and return from their target operating model. This was highlighted by the deals for Tyme Group, OpenFin, and Nymbus each of whom in banking and capital markets has proven it can serve the entirety of its client needs through its platform design, and can support operations that need high processing capacity and operational scale.
?I also noted this week that funding interest in hybrid solutions that combine banking and wealth management, with a specific focus on successful millennials continues to be a US centric theme, even given the cooling in valuations across many venture-backed industries that would undoubtedly impact rapid liquidity generation. ?
Tymebank - Singapore / Emerging Market Neobank Platform Tyme
领英推荐
Theme: Funding support here further underscores belief in the Tyme Bank operating model which blends e-commerce and banking, and particularly targets launching neobank platforms in markets with large aspiring lower to middle class clients, either unbanked or underserved by existing institutions. Its success to date has been built on its partnership and client acquisition strategies which seem to be able to align shareholder, partner, and Tyme Group’s own interests.
Onyx Private Bank - US / Digital Premium & Private Banking Platform Onyx Private
Theme: This early funding represents belief that emerging wealth clients will be looking for a new type of digital first premier and private banking experience, where advisory, lifestyle management and financial service delivery will all play a prominent role in the engagement and economic model. The capabilities of the platform are still quite rudimentary to better serve the segments being targeted so it will be interesting to see how the money is used toward both product development and client success.
Nymbus - US / Banking Digital Infrastructure Nymbus
Theme: I have talked about the fact before that in the US market, the extreme fragmentation one sees in the operational footprint of banks and credit organizations provides a fertile environment for organizations that can deliver digital infrastructure and service delivery capability. This is where Nymbus sits and thus suggests that they are identifying target segments that are turning to them to enrich and expand their digital banking and lending capabilities. Their position in Florida gives them an opportunity to take their offering offshore as well as into central and south America.
Plenty - US / Planning & Wealth Management for Couples Plenty
Theme: Plenty has acquired funding to bring its goal planning, savings, and affiliate wealth management model. It is seeking to offer this for couples, more so than individuals and is seeking to help millennials, now in relationships to work with a partner aligned to the complexities of managing and allocating dual household income and assets into appropriate savings and investment products. ?From what I have read the target audience would be quite successful later stage millennials which seems like quite a narrow band of target clients to begin testing the proposition with.
Pyrpose - Switzerland / Impact Investing Pyrpose
Theme:?The small initial funding for Pyrpose reflects recognition that for those who really want to see investment aligned to their sustainability principles it can be very easy to avoid the risk of greenwashing or of a misalignment of preferences. Pyrpose are trying to change this through a direct investing platform through which individual cannot only invest their capital but also better understand in that process the impact that this has in relation to their “personal” contribution to creating a more sustainable environment.
Unlimited - US / Hedge Fund Strategy Investing Unlimited
Theme:?One of the things about the ETF market is that it has a very long tail of funds that invest based on different principles rather than acting as market proxies. While these are not nearly as popular, they do often represent an opportunity to build asset allocations into different investment styles as a way of improving alpha and a person’s risk/return profile. Unlimited has built a platform to tap into this, with ETF strategies that individuals and advisors can use to directly invest at low cost in a range of popular alternative investment techniques.
Openfin - US / Enterprise Open Finance Operating System Here? (formerly OpenFin)
Theme:?Openfin has developed a large and growing footprint for its O/S which allows institutions to build and manage their own open finance desktop, so that instead of relying on solutions from specific data vendors, organizations can publish and subscribe to APIs and then rapidly develop and deploy across the enterprise desktop applications to support all elements in the underwriting, distribution and trading of capital market products.?Openfin will probably use the funding to try to not only deepen its penetration across the enterprise in the middle office and support functions, but also to further internationalize this.