Private equity firm TA Associates has acquired a majority stake in Confluence, provider of software for data management, investor communications and regulatory reporting for mutual funds and fund administrators.
“TA’s investment represents a unique opportunity to partner with a firm that generates key growth initiatives, and maintains a longstanding track record within the financial technology and software sectors,” says Mark Evans, CEO of Pittsburgh-based Confluence.
Confluence, founded in 1991, sells financial services data management software for regulatory filings, investor communications, and performance reporting and analytics. The company reports that its customers include several of the largest global fund administrators and asset managers, more than 90 percent of the U.S. mutual fund market, and exchange-traded funds, alternatives investment managers, institutional investors and UCITS funds for European investors. Besides Pittsburgh, the company has offices in Brussels; Dublin; London; Ho Chi Minh City, Vietnam; Luxembourg; and San Francisco.
According to Confluence, the managers of more than 80 percent of the so-called ’40 Act funds, which includes mutual funds, use Confluence software for the modernized U.S. Securities and Exchange Commission filings mandated since 2016.
“As asset managers adjust to comply with the increasing data aggregation and processing requirements, we see this as an attractive time to enter into a niche market at an early stage,” says Kenneth Schiciano, a TA Associates managing director who is joining the Confluence board of directors.
“We have closely followed the success and development of Confluence for over a dozen years and have been impressed with the company’s long-term vision and global expansion,” adds Jonathan Meeks, another TA Associates managing director joining the Confluence board.
Schiciano says TA Associates expects Confluence will grow organically as its business scales up. Confluence’s potential market is large—the company estimates the financial services data management software market to be more than $1 billion.
Boston-based TA Associates targets companies in technology, healthcare, financial services, consumer and business services industries. The PE firm has raised $24 billion in capital since its founding in 1968, and it manages $7.25 billion in its current funds. TA has more than 80 investment professionals in Boston; London; Menlo Park, California; Mumbai; and Hong Kong.
TA Associates has recently invested in software providers for the real estate, financial services and healthcare sectors. TA Associates agreed to invest in MRI Software, provider of software for residential real estate lease and tenant management software, with GI Partners retaining its stake in the company.
The PE firm acquired ITRS, provider of monitoring and analytics software for financial services firms, from the Carlyle Group (Nasdaq: CG). ITRS clients include Charles Schwab Corp. (NYSE: SCHW), SunGard, J.P. Morgan & Chase Co. (NYSE: JPM), Deutsche Bank (NYSE: DB), Citigroup Inc. (NYSE: C) and Wells Fargo & Co. (NYSE: WFC).
And TA Associates made a minority investment in Retriever Medical Dental Payments Inc., provider of payments software for large healthcare providers, physician practices, dental offices and veterinary clinics.
Financial terms of TA Associates' investment in the company were not disclosed. TA Associates’ legal counsel on the deal was Goodwin; Jones Day was legal counsel for Confluence. Raymond James was the financial advisor to Confluence.