Belvedere Weds Clarke+Tinney, Scudder Likely To Buy GPS?

CLARKE+TILLEY Ltd., the London-based software developer, has acquired a majority stake in Belvedere Financial Systems Inc., creating a new vendor dubbed DST Belvedere Inc. The deal comes in the wake of DST Systems Inc.'s acquisition last month of Clarke+Tilley.

The merger was triggered, at least in part, by expected customer demand for Belvedere's new Global Portfolio System (GPS). Among others, sources say New York-based investment firm Scudder, Stevens & Clark is likely to buy the product.

In the agreement between the two vendors, DST's Clarke+Tilley becomes the majority shareholder in the new DST Belvedere. Belvedere parent company WSC Group will maintain a minority share in the new venture.

The aim of DST Belvedere in the U.S. will be to advance ongoing development efforts for Belvedere's GPS, as well as to continue marketing GPS to investment and money management firms. DST Belvedere will also provide marketing, service and support for Clarke+Tilley's U.S. client base.

Overseeing the operation will be Clarke+Tilley managing director Mike Winn. Belvedere president Joe Nicholson is to remain with DST Belvedere in a managerial role. Nicholson says his title and specific responsibilities have not yet been determined.

Negotiations for Clarke+Tilley's acquisition of Belvedere were in progress at the same time DST Systems began its bid for Clarke+Tilley. DST's acquisition was announced June 24, while Clarke+Tilley assumed its parental role of Belvedere two weeks ago.

Nicholson says that DST Systems' involvement in the deal was a positive influence because the vendor is a well-known provider of transaction processing services. DST, based in Kansas City, Mo., operates a large bureau-service facility specializing in statements processing and shareholder accounting for mutual funds.

Belvedere's GPS system is currently in use at several institutions, among them Boston-based Harvard Management Co., State Street Research & Management Co. and Batterymarch Financial Management. Nicholson says Belvedere's march for a venture partner began six months ago when the vendor recognized that its client base would be expanding in the near future.

Two clients have recently signed letters of intent to purchase GPS and several other firms have expressed a strong interest in the system, says Nicholson. Belvedere expects to announce within the next 30 to 60 days the addition of two major firms to its client roster, he says.

Nicholson says the size of the expected new installations-in teams of processing volume and numbers of users will require the vendor to beef up its support and marketing staff. "Now that the agreement [with Clarke+Tilley] has been reached-we expect to double in [staff] size in the next year," he says.

Nicholson declines to name the firms that have signed letters of intent. However, one source says that Scudder is likely to become a client of the new DST Belvedere.

Scudder has been evaluating Belvedere's GPS system since last summer. However, until recently, Scudder was also beta-testing Thomson Financial Services Inc.'s Portable Portia product. Sources say those tests are now on hold and that Scudder is close to signing a deal with Belvedere.

Belvedere's alliance with Clarke+Tilley also stems from its need to add front-end functionality to GPS, says Nicholson. Belvedere currently markets GPS as a core accounting engine: Users purchase the system's source code and then use object-oriented programming and relational database technology to customize it.

GPS runs on Unix-compatible platforms including those provided by Sun Microsystems Inc., IBM, Digital Equipment Corp., Pyramid Computer Corp. and Hewlett-Packard Co.

The system makes use of rule-based object processing and is written in the C programming language. Users access data residing in GPS using Structured Query Language (SQL). Nicholson says the system is "database independent" and would be compatible with any relational database management system. The vendor currently has installations making use of Sybase Inc.'s RDBMS as well as ASK Computer Systems Inc.'s Ingres.

GPS handles multicurrency processing for all the transaction types it covers, which include complex derivative instruments, forwards, options and foreign exchange. However, GPS does not currently have the kinds of portfolio management and analytics that high-end clients look for. "We need to supply more of a complete package to clients, and to accelerate the process of packaging new front ends for the system," says Nicholson.

Nicholson cites Clarke+Tilley's expertise in that area as one of the main reasons for the alliance. Clarke+Tilley currently markets three portfolio management and accounting systems: Impart, a PC-based system; Uptix, which runs on Unix servers; and Paladign, which runs on AS/400 servers.

Managing director Winn says that part of the new development effort will be to focus on creating a new graphical user interface for the system, incorporating Paladign's front-end functionality.

Winn says new features planned for GPS include performance reporting and performance attribution capabilities. The vendor also plans to create deal-capture screens for the system, as well as screens tailored for use in specific countries.