Summary List Placement
The global investment management software provider has secured $150 million in funding from tech fund Iconiq Growth in return for a minority stake, doubling its 2019 valuation to $1.5 billion, per PR Newswire.
Enfusion’s integrated platform offers cloud-based solutions across the entire investment value chain: It provides software for portfolio management, services that streamline middle- and back-office operations, and data analytics to augment investment decisions, among other areas. Enfusion acquired some 150 of its 550 clients last year to cap a strong year of growth in 2020.
Investor interest in Enfusion and its customer growth are likely fueled by asset managers’ interest in third-party solutions to alleviate margin pressures and drive their growth strategies. Global asset managers are suffering from shrinking margins as demand and asset allocation grow for lower-fee passive strategies, while operational costs also rise due to swelling costs in compliance, among other areas. In response, asset managers are leveraging vendor solutions to drive operational efficiencies and cut costs.
Moreover, third-party solutions present an opportunity to harness emerging technologies, such as AI, to support growth strategies with data-powered insights that demystify newer strategies, such as ESG portfolios, which require alternative data to measure the nascent criteria. This likely endeared Enfusion to investors, as its integrated solution enables clients to both tackle cost pressures by outsourcing core processes and harnessing data sets to derive insights and exploit growth areas.
Asset managers are increasingly seeking end-to-end solutions—rather than individual vendor solutions—to feed digital transformation, a trend that will continue throughout 2021. Software vendors of integrated solutions that provide one comprehensive system of services across the entire investment lifecycle have grown their client bases rapidly in recent years.
Integrated solutions enable asset managers to break down information silos—which can develop when working with different vendors and multiple solutions—and connect their wealth of data sources across their various business units. The trend of front-to-back solutions has powered the rapid growth of BlackRock’s Aladdin and Bloomberg’s Aim, and also led to the $2.6 billion acquisition of Charles River by State Street in 2018. Enfusion’s growth trajectory is further testament to this mega-trend of investment managers striving to consolidate their systems.
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Source:: Businessinsider – Finance