Anthony Malakian: Independent No More
A look at StatPro's acquisition of Investor Analytics.
“People would like an adequate solution from people they know, rather than a better solution from people they don’t know. That hasn’t always been the case—I think everyone has always looked for best-of-breed. There are grades of nuance, but that’s something we’re seeing.” A source on the buy side recently said this to me over lunch, and I was surprised by the somber sentiment.
There are assumptions being made in that statement, too. First is that an older, larger firm with a full suite of solutions can’t produce a best-of-breed product. As far as terminals go, I’m sure Bloomberg would dispute that claim. And there are a host of startups that offer cutting-edge, quality products that hedge funds clamor for.
The source is a senior executive at a large technology vendor, so I couldn’t help but think that he was being lukewarm about the company’s own offering. But the more I thought about it, the more I agreed. The proof of what he said lies in the consolidation we’re seeing in the market, the increased number of large consortia projects, and the drive for vendors to launch utilities and managed services offerings.
Big Deal
SS&C’s February 2015 purchase of Advent sent shockwaves throughout the buy side. There’s a lot of overlap when you look at the two companies’ offerings—especially when it comes to fund accounting solutions, which has been cause for concern. But even so, Advent has proven a specialist on the buy side, and SS&C wants to improve its buy-side chops.
If this is the first of numerous moves, establishing the winners and losers might take years.
When you look at companies like Bloomberg, Markit, Broadridge and Fidelity National Information Services (which bought SunGard in the fourth quarter of last year), SS&C is looking to keep pace with those behemoths.
All of this brings me to Investor Analytics. In late January, as Waters was going to press, StatPro—which offers risk management, performance and attribution, and GIPS compliance and analytics reporting through its cloud-based Statpro Revolution platform—bought the New York-based risk analytics provider for $16 million. The sum isn’t huge—especially when compared to the $2.3 billion that SS&C forked out to nab Advent. But it is a big deal, as Investor Analytics is well-respected. While it only has just over 50 clients, my sources have always had nothing but positive things to say about it.
On the other side of the equation, StatPro is also highly respected and has over 450 clients. It’s taken home numerous industry awards, including several from this publication. The interesting thing about this deal is that it really makes sense on paper.
Given that the deal happened on a Friday just before my deadline, I will report at a later time on what the industry thinks of the marriage. But it does look like one where customers on both sides will benefit and the integration shouldn’t be too onerous. Both products are cloud-based. Investor Analytics’ founder and CEO Damian Handzy says both development teams work in similar ways, so the integration should be smooth. And since Investor Analytics has a strong footing in the US, and StatPro is predominantly focused in Europe, it will open cross-Atlantic opportunities as StatPro looks to expand its global client base.
Investor Analytics specializes in Monte Carlo simulations and variance/covariance risk and factor modeling. Those calculations will run alongside StatPro’s historical simulation risk model and portfolio pricing capabilities. Both offer stress-testing functionality, but they do the calculating in different ways, according to Handzy. Whereas StatPro does it through simulation, Investor Analytics does it through repricing and factor-modeling capabilities.
“The way we do risk, and the ways that they do risk—there is almost no overlap in the methodologies that we use,” Handzy told me.
He said the deal was done because over the last four or five years, buy-side firms have been looking for bundled services, rather than having to piece together a full enterprise risk program.
I can’t help but think that another big acquisition is in StatPro’s future to broaden its spectrum of services. I think this deal is a good one for the buy side … but if this is the first of numerous moves, establishing the winners and losers might take years.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Emerging Technologies
Asset manager Saratoga uses AI to accelerate Ridgeline rollout
The tech provider’s AI assistant helps clients summarize research, client interactions, report generation, as well as interact with the Ridgeline platform.
LSEG rolls out AI-driven collaboration tool, preps Excel tie-in
Nej D’Jelal tells WatersTechnology that the rollout took longer than expected, but more is to come in 2025.
The Waters Cooler: ’Tis the Season!
Everyone is burned out and tired and wants to just chillax in the warm watching some Securities and Exchange Commission videos on YouTube. No? Just me?
It’s just semantics: The web standard that could replace the identifiers you love to hate
Data ontologists say that the IRI, a cousin of the humble URL, could put the various wars over identity resolution to bed—for good.
T. Rowe Price’s Tasitsiomi on the pitfalls of data and the allures of AI
The asset manager’s head of AI and investments data science gets candid on the hype around generative AI and data transparency.
As vulnerability patching gets overwhelming, it’s no-code’s time to shine
Waters Wrap: A large US bank is going all in on a no-code provider in an effort to move away from its Java stack. The bank’s CIO tells Anthony they expect more CIOs to follow this dev movement.
J&J debuts AI data contracts management tool
J&J’s new GARD service will use AI to help data pros query data contracts and license agreements.
An AI-first approach to model risk management
Firms must define their AI risk appetite before trying to manage or model it, says Christophe Rougeaux