Buy-Side to Benefit by FactSet’s Portware Acquisition

Portware's flagship offering, the Portware EMS, winner of the best EMS category in the 2014 Buy-Side Technology Awards, is a buy-side focused, multi-asset execution management system with an appreciable buy-side following in its traditional stronghold of the eastern seaboard of the US, although it does have buy-side clients in Europe and across the Asia Pacific region.

New York-based Portware also boasts an analytics platform dubbed Alpha Vision, designed to sit on top of the firm's EMS and assist buy-side traders by optimizing their trading decisions. Portware acquired Alpha Vision from Aritas, the renamed Pipeline Trading entity, rebranded to help the dark pool operator disassociate itself from the original agency brokerage business in the wake of the SEC-led investigation, precipitated by the disclosure that buy-side orders had been matched outside of its dark pool for a number of years, a disclosure that ultimately proved terminal for the dark pool operator.

Today's news follows hot on the heels of FactSet's acquisition of Code Red, a provider of research management technologies to the global investment management industry, including traditional asset managers, endowments and foundations, hedge funds, pension funds, and sovereign wealth funds, announced on February 9 this year.

Analysis: What does this news mean to the capital markets and more pertinently to Portware's buy-side clientele? In short, it's probably not a bad move from their perspective, given FactSet's standing in the industry, its long track record of continued growth since its founding back in 1978, and the position the combined entity will soon find itself in where it'll be able to provide buy-side firms with not only datasets and analytics, but also with a tried and tested trading front-end with extensive connectivity and numerous embedded trading algorithms that will allow them to trade with the minimum of fuss. In all likelihood, the Portware brand will disappear over time ─ history has taught us that re-branding exercises are part and parcel of such deals, irrespective of the history and profile of the brand concerned ─ but it's unlikely that FactSet will tamper much with the what's under the Portware hood. If anything, given Facset's global reach, its mature sales Pipeline and its significantly larger headcount, this development will turn out to be something of a boon for both new and existing buy-side clients.