Confluence Buys StatPro

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Confluence Technologies, a US-based provider of automation software for investment managers, has bought StatPro, a cloud-based UK firm that offers portfolio analytics through its SaaS-delivered tools, for £161.1 million (more than $207 million) in cash. As a result, the London Stock Exchange-listed StatPro will go private.

The combined businesses are looking to marry StatPro’s presence in the front and middle offices to Confluence’s value in the back office to create an end-to-end solution for asset managers and fund administrators, Mark Evans, founder and CEO of Confluence, tells WatersTechnology.

“When you look at our regulatory platform, and you look at StatPro’s ability to measure and present risk, those two things are meat and potatoes. …The closer your systems are tied together—such that the risk numbers that live in a regulatory presentation are provably correct and provably tied together—is really exciting to us,” he says. “But I think it’s much larger than that. …I look at [StatPro] more as an intellectual asset than specifically a product asset. I think that as an intellectual asset, they have taken a view that is absolutely consistent with our view that decisions are made and data is consumed, it’s churned into some decision-making processes, things come out of that, and then instead of it disappearing, it should continue to move down the line. They’re actually a powerful offering for the middle office.”

The buy side is facing a host of challenges—increasing cost pressures, tightening margins, competing with passive strategies, and headcount reductions, to name a few. Evans says that this deal is “the exact thesis” for alleviating those pain points.

“The challenges that [clients] are having are to some degree exacerbated by the fact that they can’t focus on those challenges because they spend so much time worrying about the plumbing,” Evans says. “Our commitment is…to simply improve and innovate around the flows of information, the flows of data, the transfer of information into knowledge, the regulatory reporting, the statutory reporting—all these things that have to happen irrespective of the products you’re making.”

By investing further into automating those processes, Evans hopes the deal gives both client bases more time and room to innovate, as well as more confidence in and control of their data, particularly as the timespans given by regulators for companies to file various reports shrink.

A key attraction for both companies was geographic location. With each firm’s respective presence and brand confidence, Confluence, which is headquartered in Pittsburgh, hopes to capture a larger European base, while returning the favor for London’s StatPro in the US.

The pair still have a lot of work ahead of them in terms of figuring out how best to integrate existing tools and other assets, Evans says, but at the moment, they’re being very deliberate in making sure that their engineering teams, sales and marketing teams, and product teams are tied tightly together.

“Between the two companies, we have an awful lot of touch points into the companies that are out there [around] the globe,” Evans says. “And being able to be globally aware but locally present is absolutely critical for our market,” Evans says.