Investment management software incumbent, Blackrock-owned Aladdin is attracting competitors. The latest example is Clearwater Analytics which is purchasing front-office solutions provider Enfusion for US$1.5 billion. Emphasising the threat, Clearwater recently hired former Aladdin Product Group Jody Kochansky who will head the combined unit.
Clearwater’s acquisition marks further consolidation in the financial technology sector as asset managers increasingly demand integrated cloud-based solutions. In Europe, 2023 had seen the merger of Axioma and Simcorp in 2023 as part of Deutsche Börse revamped Horizon 2026 strategy for its Investment Management Solutions.
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The acquisition combines Clearwater’s middle and back-office expertise with Enfusion’s front-office capabilities, particularly in serving hedge funds and alternative investment managers. The combined entity aims to create what Clearwater chief executive Sandeep Sahai calls “a unified, cloud-native, front-to-back platform” for institutional investors.
Industry observers see the deal as a response to growing demand for integrated investment management solutions. Trium Capital, a London-based multi-manager hedge fund, recently reported annual savings of US$150 thousand after implementing Enfusion’s platform, highlighting the potential cost benefits of cloud-based solutions in the sector.
“The versatility of Enfusion’s platform has been crucial for firms managing complex multi-asset strategies,” said Patrick Mang, chief operating officer at Trium Capital, in a recent client testimonial. “One person can now manage up to ten managed accounts, significantly reducing operational overhead.”
The Idaho-based company, which handles daily reporting on more than US$7.3 trillion in assets and is specialised in revenue analytics, is reinforcing its offering in the investment management space. It will pay US$11.25 per share in an equal mix of cash and stock for Enfusion, representing its largest acquisition to date.
Clearwater expects to achieve US$20 million in cost savings over two years through operational efficiencies, primarily by streamlining administrative expenses. The company also anticipates expanding its total addressable market by US$1.9 billion, particularly in the hedge fund sector where Enfusion has established a strong presence.
The transaction, advised by J.P. Morgan Securities, comes as investment managers face increasing pressure to automate their operations and reduce costs while handling growing complexity in their portfolios. Enfusion’s CEO Oleg Movchan will join the combined entity, though his specific role was not disclosed.
The deal is expected to close, subject to regulatory approvals and customary closing conditions.
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