Funding and Deals in Wealth, Asset Management and Banking Technology and Services April 16th to April 23, Summary and Rationale
Deals week of April 16th to 23rd
Overview: In general a week of smaller deals that represent bolt-on acquisitions that further enhance capabilities within the buyer’s existing client base and operating model, as well as scale in terms of the ability to deliver services that were already being offered but were suboptimal.?There is also a theme of divestment in some of the deals where the seller is exiting from non-core assets following a strategic review by new management, doing so both in terms of a particular type of service offering as well as a particular market presence.?The later does not always reflect a loss making situation, but rather one where a combination of regulatory and macro considerations no longer seem to lend themselves to the seller’s operating model.
Smartasset/Deftsales SmartAsset
Rationale: Smart Asset has acquired Deftsales as a means of providing a way to further advance its service offering to financial advisor via lead generation tools, alongside its current business models. The substantial integration that deftsales has with all the leading CRM systems that are used by the wealth industry means that Smartasset should be able to create and support a full solution to convert prospects to leads and clients in a much more seamless way.
Atria Wealth Solutions/Grove Point Financial Atria Wealth Solutions
Rationale: This deal offers Atria both a significant improvement in the scale of its advisory and wealth management practices, as well as another meaningful asset in an attractive demographic footprint. Atria is quickly becoming a much more significant consolidator for wealth management businesses that want to become part of a full solution stack, especially for firms that are truly looking to retain the hybrid investment and brokerage service model.
Mattioli Woods/ Doherty Pension & Investment Consultancy Mattioli Woods
Rationale: With more organizations providing pensions in the UK and Northern Ireland, this bolt on deal will provide MW with the additional ability to offer pension consultancy services to both employers as well as employees. It is noticeable of late that many listed firms with strong pension businesses have been seeking to widen the scope of their service offering to employers as part of an evolving financial wellness program.
Redmill Advance/Expert Pensions Redmill Advance
Rationale: A bolt on acquisition that underscores the expectation that advisory and wealth practice firms will not only continue to upgrade the skills of their front office staff, but that they will also increasingly look toward expanding the footprint of their staff that can interact with clients to support simplified advice and better consumer duty of care.
Banque Havilland/Banco Inversis Banque Havilland S.A.
Rationale: Inversis seems like a natural home for the institutional custody business that Havilland is selling in order to double down on its focus on private banking and wealth management services. The firm has been both expanding its footprint as well as consolidating its operational model to start to increase scale, and this disposal might signal non-organic growth pursuits in these areas.
No deals.. Maybe
HSBC France/Cerberus 汇丰
Rationale: ?HSBC seems like it is still likely to exit the French market and leave Cerberus to try to revive Credit Foncier, but deal terms may need to shift given the value of the interest income stream now that rates have risen, and return on capital has improved.
Consideration
Liontrust/GAM Liontrust Asset Management PLC
Rationale: Increase Scale, potentially tap into a new market that traditionally has strong interest in sustainability investing. Challenge will be in relation to real synergies across different types of organizations with different client profiles. Shareholder response seems sceptical.
Goldman Sachs/Greensky 高盛
领英推荐
Rationale: ?Deal, if it were to happen, would further represent another step in GS withdrawal from consumer finance, which has often been considered the pillar of the Marcus strategy to create profitability. ?Deal would also underscore that GS might be seeing increasing delinquency rates in the quality of their loan book. Deal comes at a time when firm widened its relationship with Apple.
New Funding for week of April 16th to 23rd
Overview: We had a range of different themes in this week’s funding. One of them related to the way in which former consultancy practices have developed both software and subscription service capabilities in particular areas to leverage their IP and build different types of fundable companies. This has been most easily achieved in solutions that cater to institutional investors, as was seen in the strategic funding achieved by both Bluemark as well as Bixby. ?Some fundings this week also reflected solutions aimed at the retail wealth market. While demand to fund pure trading businesses focused on disrupting the brokerage market has certainly waned, investors are still supporting ventures that are seeking to build long-term investment management solutions, as well as those that enable advisors to deliver holistic advisory services across real estate, insurance, alternatives, digital and traditional investments.
Clerkie, AI, Debt Management, Financial Wellness $33ml Clerkie
Rationale: Funding here reflects the growing concerns that higher interest rates will turn into more delinquency and loan losses, and in turn a greater need for debt management. Clerkie are one of a number that are trying to humanize as well as personalize at scale debt collection and restructuring programs so that lenders can both be more proactive and more sensitive in helping clients with their debt management challenges.
Tiicker, Client Engagement, Perks & Loyalty Schemes, $7ml TiiCKER
Rationale: Funding here represents interest in the convergence between publicly traded brands that can introduce “perks” and retail shareholders as recipients of these. ?While perks might in themselves not be a driver for new equity acquisition, it may well represent a way to keep registered retail investors engaged and more stable.
NextMarkets, Brokerage, Commission Free, E10ml nextmarkets
Rationale: There was an indication that Nextmarkets were going into liquidation but now this does not appear to be the case. The company has suggested as part of the funding that they will be able to expand their offering, as well as look toward non-organic growth by acquiring other struggling neobrokers but it remains to be seen.
BlueMark, Impact Investment Verification, Analytics, Benchmarking, $10ml
Rationale: ?Funding here represents investment into an emerging field in the impact investing area and one of relevance to institutional investors that are managing long-term investment capital. Bluemark was born out of a consultancy practice, and now is building a robust analytical and reporting capability to help institutional investors benchmark their impact investing practices and performance.
Bixby Research, Credit Information, Private Loans, $5.5ml Bixby Research & Analytics Inc.
Rationale: This represents a strategic investment by Fitch in Bixby who they have already collaborated with on credit research project initiatives. The funding will help Bixby further expand their capacity to provide research and credit information services on private lending structures.
Colbr, Account Aggregation, Wealth Management, E1ml
Rationale: Funding here is for a company that shares similarities to Pax Familia and Finery although it appears to have taken a further step in bringing account aggregation closer to the advisory process through its operating model, as well as seeking to provide a broader aggregation to alternative and digital assets than some of its competitors.
Bloomo Investments, Investment, Equity Trading, Y800ml ブルーモ証券 Bloomo Securities
Rationale:?Funding here is to provide a digital asset management platform with the means of expanding their offering as well as getting through the regulatory process so that they can provide a securities and model portfolio service to new retail investors. The service is focused on bringing together a combination of replication strategy, financial education, and social community with the objective of delivering a long-term low cost investment platform based around US equities and ETFs.
Fintech Farm, Neobank Infrastructure, Emerging Markets, $22ml Fintech Farm
Rationale: Funding here is for a UK based neobank platform company created by 3 Ukrainians that is launching neobanks in small, underserved emerging markets. The firm is targeting countries with immature banking systems with an e-money proposition that unbanked users can use in place of a full bank account.??