M&A Deals and New Fundings focused on Wealth, Asset Management and Banking Services and Technology – April 22 to 29th, Themes and Rationale
Deals week 22 to 29th April
Overview: While M&A transactions will only be executed when the right pricing and shareholder alignment to value is achieved, deals this week underline the fact that buyers, motivated by both opportunities to more rapidly scale, as well as achieve platform design capabilities are often willing to pay-up to create purchase opportunities. ?This is particularly true when the target offers a combination of market presence, functional capabilities, and sustainability profitability that the buyer would not be able to replicate. The current challenging macro environment has also made firms that are in a difficult funding place realize that considering de-bundling some of their IP might prove to be a necessary strategy.
Deutsche Boerse to acquire Simcorp Deutsche B?rse
Rationale: The exchange clearly sees a significant opportunity to bring the leading asset and data management software provider in Europe together with Qontigo and ISS, other firms that service other parts of the value chain for the same client base.??For a number of years, exchanges have been trying to develop stronger direct relationships with institutional investors beyond that acquired via their direct investment activity, and this clearly will help the exchange further deepen its technology presence, while also providing it with an opportunity to further expand its data services capability.
Lumiant to acquire Genivity Lumiant
Rationale: ?Lumiant sees this bolt on acquisition as enhancing its offering in the Longevity financial planning area in a way that it clearly felt would complement its more general capabilities, as well as providing a richer resource for a critical client bank for advisor revenue. Longevity planning involves a much greater examination of healthcare risk and its associated costs, and thus naturally aligns an advisor to delivering a broader solution design to marry protection solutions, with wealth and planning.
First rate to acquire certain assets of Investedge (compliance) First Rate, Inc
Rationale: First Rate has become far more active in corporate development of late, and this acquisition of Investedge’s compliance assets not only further expands the value chain delivery of its own reporting suite beyond performance, but also creates a significant opportunity for First Rate to attack the bank wealth segment as another client segment it serves.
Deutsche Bank to acquire Numis 德意志银行
Rationale: It might seem unusual that a European banking giant would find it enticing to buy a UK corporate broker when IPO volumes in the UK are very weak, but Deutsche Bank has clearly recognized, even whilst paying a hefty premium that Numis will quickly give it scale in corporate mid-market across the UK/Ireland that it could not possibly achieve, and also may give it a significant uplift in some of the FICC service lines that it would hope to provide to the clients that Numis has been servicing.
Deal Rumours
Degroof Petercam Degroof Petercam
Rationale: Having been approached by Belfius, talk in the market is that Degroof is now examining its option amid the strong possibility that the private bank would attract other bidders, such as ING and Credit Agricole Group. It is increasingly clear that many private banks that have been trying to run integrated wealth and market businesses are struggling to cope with much tougher capital, risk and regulatory requirements, and thus need to either increase scale through M&A or consider cashing out.?The size of Degroof is large enough for it to consider both.
Funding week April 22nd to April 29th
Overview: Investors are generally still comfortable to invest in B2B Fintech plays, and are particularly willing to back, what I would describe as “building block” propositions. ?These types of firms have recognized specific but large problem areas where FI organizations either lack flexibility or are encumbered operationally.??Firms that are addressing these infrastructure problems aren’t always solely aiming to do so by empowering product and development cohorts through SAAS platform designs, but this tends to be the approach when firms are going to be consuming their own data or 3rd party data for a particular set of business and operational objectives.??One biproduct of this type of innovation is that it often leads to a plethora of protocols, data models, and integration service options and thus is inviting consideration of new types of middleware ETL services specifically to ensure flexibility in leveraging the application portfolio.
42MarketsGroup, Investment Company & Incubator, Capital Markets Infrastructure, US$10ml, IM 42Markets Group
Themes: Inclusiveness, Digital Finance Proponent
Rationale: Broader story here reminds me of the much larger play in Wealth that has been advanced by TIFIN Group. 42MarketsGroup as an investment company is building a portfolio of companies that are seeking to transform treasury and capital market operations, focusing its effort on bring a combination of new infrastructure at the back end, and greater automation in workflow creation and processing as its key drivers.
Teahouse, Defi Asset Management & Algorithmic Investment Strategies, US$5ml, VC Teahouse Finance
Themes: Liquidity Management, Secure Asset Management
Rationale: I wouldn’t normally cover defi fundings, but Teahouse funding success may well be timely not only because of the more positive sentiment that has been underpinning higher valuation of many crypto assets, but also because it is in the area of liquidity and asset management where the industry needs more mature capabilities to support institutional self-directed interest.
领英推荐
Plumery, Customer Experience, Rapid App Building, Data & Insights, US$4.5ml, VC & Angels Plumery
Themes: Innovation, Speed to Market, Cost
Rationale: Investors here clearly believe that many financial institutions, whilst they have some initial capabilities to introduce web and mobile applications for their clients will struggle to continue to enhance and extend initial efforts, while also learning from their client’s experience. Plumery has a platform design which aims to tackle this through a combination of capabilities that should allow product innovation and software delivery to work more productively while also better aligning customer needs to feature set upgrades.
Ipushpull, Chat based connectivity, Workflow Automation, no code, ￡3.6ml, Strategic Minority ipushpull
Themes: Productivity, Superfast Data Sharing & Distribution
Rationale: As a firm that has invested consistently in technology companies that seek to improve productivity through a combination of more embedded integration with streamlined workflow automation, the investment here from TP ICAP continues a theme.?Many of Icaps clients often need assistance from technology and data providers to properly integrate and process data feeds, particularly in pricing models that involve derivative instruments, and ipushpull offers a connectivity and chat platform to facilitate this support need.
Axoni, Capital Markets Infrastructure, Data Management, US$20ml, Growth Equity Axoni
Themes: Data Harmonization, and Extensibility
Rationale: Investors here are tackling a challenge that many of the more established enterprise data management vendors have struggled with – real time data synchronization and harmonization. ?With firms finding it necessary to consume a broader array of data sets to support investment strategies as well as STP for downstream securities operations, the need for consistent, and accurate data is often difficult to achieve. This is the problem that Axoni has been tackling, and is gaining traction with its approach in both capital markets and investment management.
Bits Technology, Digital Transformation, Client Experience, APIs, E4ml, VC Bits Technology
Themes: Design & Integration Flexibility for Digital Fintech Solutions
Rationale: There are a number of new API orchestration companies that believe the mushrooming of API solutions across the client and transaction life style is leading to a need for a new types of middleware. Bits is seeking, it looks like to introduce a translation layer so that organizations can have more flexibility in managing a broader ecosystem of embedded solution providers. I would imagine the thinking is that given different types of subscription models for API consumption and different use case scenarios that demand specific API service integration, Bits wants to provide a management console for product development.
1fsWealth, Data Collection, Reporting Services, VC 1fs Wealth
Themes: ?Asset Aggregation, Portfolio Reporting
Rationale:?There is an increasing pool of companies that are building data management platforms aimed at the UHNW and smaller institutional market where the challenge is both to collect data on a broader set of illiquid and esoteric investments, as well as properly analyse attributes of such assets, esp. in areas like sustainability/ESG. ?1FS is seeking to tackle both of these, with a particular focus on coverage of asset classes that are either unregulated, or are only accessible via private marketplaces as opposed to exchanges.
Tembo Money, Digital Mortgage Platform, Comparison, ￡5ml, VC & Corp Ventures
Themes: D2C Comparison, Mortgage Lending
Rationale: Tembo, as a mortgage broker is seeking to reinvigorate the direct-to-consumer digital mortgage fulfilment space in a way that others before it has failed to do. I believe the underlying value proposition is tied into offering the direct client a sourcing capability that is both more precise as well as broader in scope than the supermarkets, who are often less complete in the mortgage space do, achieve. Aviva, which is strong advocate on digitization in the residential and buy to let mortgage space has remained a backer.
Credora, Credit Infrastructure, Credit Ratings, US$6ml, VC & Corp Ventures Credora
Themes: Privacy Preservation, Data Sharing
Rationale:?The thinking among both VC and Corporate investors here is that credit dislocation problems are often related to an inability of counterparties to properly share up to date data in a secure and accurate way. This leads to faulty credit decision making, as well as asynchronous assessment of credit risk.?The growth of private debt, whether it be in the digital asset space or in more traditional structures is making this challenge a much larger one.