Temenos Group is buing fund administration software provider Multifonds for €235 million. Keith Hale reveals what it will mean for clients
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What are the benefits of this acquisition for Multifonds clients?
Temenos brings significant scale to the organisation. We are now a 4,000-person company, so effectively we have grown 10-fold overnight. There are huge benefits to being part of an organisation of that size.
From a client perspective, there are significant vendor risk benefits of transitioning from private ownership to being a publicly listed company with greater scale. It means that we’re here for the long term, and that should offer more comfort to our clients.
Clients often get worried when acquisitions happen, however in this case, we’re adding more corporate scale as well as more product and service capabilities, since our products are very complementary and not overlapping. Putting the two companies together creates significant synergies and value for our all stakeholders.
How about for Temenos? What does Multifonds bring to the table?
The fund administration market is a $20 billion market growing at a compound annual growth rate of 10 percent, with $8 billion spent on fund accounting, investment accounting and transfer agency technology—so there is significant growth opportunity in this market.
We bring to Temenos a major new market within banking software. Multifonds’s client base includes many of the top tier firms in asset management and fund administration. Temenos’s market was core banking and wealth management products, so it is adding our additional top tier clients to its roster and getting increased exposure to the asset management market that Temenos wasn’t in before.
The result is that 38 of the top 50 banks are now customers of the group, so it’s a pretty impressive combined portfolio of clients and products.
We’ve seen a few high-profile acquisitions recently. Is this one any different?
We’ve certainly seen a few, mainly overlapping competitive systems in order to buy market share. In some well-known cases the acquiring company is itself in competition with its own fund administration clients.
So we see this as an opportunity, since we will never be in competition with our fund administrator customers. We are not buying our market share by acquisition and so we do not have multiple competitive products in the third-party administration market, for example. I don’t think that this is the right thing to do for clients.
Have you got any projects or developments lined up already? Or is it too early to say what will happen next?
Temenos and Multifonds are both best-of-breed vendors, but we’re looking at combining solutions across areas and we have already found a number where we can complement each other with joint propositions. It’s early days in integration at this point, but the possibilities are exciting.
What would you say to current Multifonds clients?
The one thing I want to reiterate is that it is business as usual for us. We hope to gain significant synergies from working with Temenos, that will mean improving our product and services so our clients won’t be negatively affected
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