MacGregor Buys Merrin From ADP Levy Plans To Keep Supporting Both

BOSTON--The MacGregor Group recently purchased Merrin Financial from ADP. The move surprised market participants, many of whom suggest MacGregor basically bought Merrin's customer base (which includes folks like AIM, Merrill Lynch Asset Management and Scudder). MacGregor president Steven Levy begs to differ.

Levy says MacGregor is committed to supporting Merrin's full product line. That includes: Merrin Financial Trading Platform (MFTP), its Windows-based order management system; InterMarket Trading Network, Merrin's order routing network, CompAlert, Merrin's compliance system; as well as its Dynamic Data Retrieval; and Portfolio Modeling and Rebalancing products.

"We plan to [release] without delay all releases Merrin promised," Levy says. That includes the launch of its FIX compliant upgrade to Merrin's proprietary ITN network. Levy also says they plan to continue upgrading the Merrin customers to the newest 6.x version of MFTP which runs on Sybase. MacGregor plans to convert the five remaining 4.x for DOS users to either 5.x for windows for 6.x for Sybase.

Levy says there are now 30 institutions using Predator. Meanwhile, Merrin currently has about 50 clients, including 13 brokers and over 20 institutions using their ITN network.

But Levy insists MacGregor has no plans to blend MFTP into Predator, its own order management system. In fact, MacGregor is planning to provide substantial cross training between the two sales teams so that both will have expertise in both products, and leverage the two. Sales will be the first to receive this cross-training, which is to begin immediately.

Levy says Merrin has the best compliance module for fixed income on the market. The maturity of the product also played a large role in the purchase. Predator focuses primarily on equities, with strong connectivity to execution venues such as POSIT. Because of this synergy, Levy believes that Merrin's fixed income market will be complimentary to Predator. And as Levy points out, they both have continuity of concepts and models.

And while Merrin will be absorbed into the MacGregor Group, its products will remain separate. Levy says there will be one head for each of the departments such as; technology, professional services and client sales. MacGregor officials said 65 of Merrin's 110 employees have made the move to MacGregor. Of those 65 employees, all of whom had direct contact with Merrin clients, are Thomas Keeling who will act as co-COO along with MacGregor's Rolando Rabines, Gina DeFrank has been appointed vice president, European operations and Jill Blumberg as vice president of product management.

Sources say the winnowing of what's left of Merrin staff at ADP has already begun. One source says, due to the company's inability to meet payroll, ADP has laid off 30 of the remaining 45 Merrin employees, this just one day after the MacGregor purchase of Merrin.

This is the latest chapter in Merrin's checkered history and marks the end of ADP's two year effort to revive it. Although Merrin was one of the first trade order management systems out of the gate, and quickly emerged as the market leader in automated securities trade order management and routing for investment management firms, the last four years has not been kind to the vendor.

Sales of Merrin's flagship product, MFTP slowed dramatically and the firm toiled converting its DOS-based system clients to the new Windows version. In fact, ADP spent the better part of two years moving Merrin customers, many of whom had done considerable customization work, over to its packaged solution. A little over a year ago, Seth Merrin, the firm's founder, resigned from the firm.

The union of the Merrin and MacGregor dramatically expands MacGregors cut of the order management system market, firmly establishing a place as the market leader. But then, that's the whole idea, says Levy. "MacGregor will provide, by far, the best solution for order management by virtue of its scale, expertise and feedback from our core customer base."