A Done Deal
There are two ways of looking at Broadridge Financial Solutions' acquisition of Paladyne Systems: 1) It's a blow to the buy side because Paladyne's solutions will become diluted, or 2) This will be a good thing in the long run because Paladyne will be better suited to adapt as its customers continue diversifying their revenue streams.
I'm going with the latter.
Since 2008, the buy-side community has been increasingly looking to expand into new asset classes in a search for new sources of alpha, or simply to hedge against another burst bubble. This has actually been a boon for Paladyne, which has grown quickly because of its centralizing data management capabilities, says Philip Lawton, a senior analyst at Boston-based consultancy Aite Group.
It's also important to note that—as of right now—Paladyne, while being a part of Broadridge's Securities Processing Solutions division, will continue to retain autonomy when it comes to its development schedule. As Broadridge's Charlie Marchesani told me yesterday, "We don't have any plans to change Paladyne's technology path, vision or strategy; we will maintain Paladyne as a separate business unit."
So because of Paladyne's existing suite of products, and because it will retain some sort of independence, the threat of dilution seems to be minimal.
But Aite's Lawton points out two other risks that could sink this merger. The first comes down to simple employee integration. If those key developers that made Paladyne what it is today decide to jump ship because they feel intellectually stifled, then it could lead to a slow deterioration in quality.
"The big question is whether or not the key people at Paladyne Systems will fit in at Broadridge once they stop celebrating the deal and start worrying about day-to-day life in a new environment that includes all those public reporting questions [since Broadridge is a publicly traded company]," he says.
Lawton points out, though, that Broadridge has acquired several companies throughout the years and has extensive experience pulling off these integrations.
The other area of concern is around just how fast Paladyne expects to grow. Paladyne's CEO, Sameer Shalaby, has made it clear that he expects the vendor to very quickly be able to tap into Broadridge's sales network. But Lawton says this will likely prove more easily said that done.
"It appears as though Paladyne is expecting considerable synergy from Broadridge's sales network," he says. "But purchases at sell-side firms and buy-side firms just don't travel in the same circles. A very, very effective Broadridge sales manager may not actually know anybody on the buy side. So it may take longer to prove out than what is in the Broadridge budget."
As always, we will keep an eye out for any signs of cracking.
In Memory
Finally, I'd like to turn your attention to Waters' tribute to those who lost their lives or loved ones in the terrorist attacks on September 11, 2001. To all of those men and women, and those who are defending our freedom overseas, we send our thoughts and prayers.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Emerging Technologies
S&P debuts Spark Assist genAI copilot, draws up ‘Blueprints’ of combined datasets
S&P’s Kensho subsidiary has rolled out new emerging tech products leveraging AI to explore and combine the vendor’s wealth of datasets to solve common use cases.
Nasdaq reshuffles tech divisions post-Adenza
Adenza is now fully integrated into the exchange operator’s ecosystem, bringing opportunities for new business and a fresh perspective on how fintech fits into its strategy.
Liquidnet sees electronic future for gray bond trading
TP Icap’s gray market bond trading unit has more than doubled transactions in the first quarter of 2024.
Verafin launches genAI copilot for fincrime investigators
Features include document summarization and improved research tools.
Waters Wrap: Open source and storm clouds on the horizon
Regulators and politicians in America and Europe are increasingly concerned about AI—and, by extension, open-source development. Anthony says there are real reasons for concern.
Waters Wavelength Podcast: Broadridge’s Joseph Lo on GPTs
Joseph Lo, head of enterprise platforms at Broadridge, joins the podcast to discuss AI tools.
Man Group CTO eyes ‘significant impact’ for genAI across the fund
Man Group’s Gary Collier discussed the potential merits of and use cases for generative AI across the business at an event in London hosted by Bloomberg.
BNY Mellon deploys Nvidia DGX SuperPOD, identifies hundreds of AI use cases
BNY Mellon says it is the first bank to deploy Nvidia’s AI datacenter infrastructure, as it joins an increasing number of Wall Street firms that are embracing AI technologies.
Most read
- Chris Edmonds takes the reins at ICE Fixed Income and Data Services
- Deutsche Börse democratizes data with Marketplace offering
- Waters Wavelength Podcast: Broadridge’s Joseph Lo on GPTs