One year on from Advent’s massive acquisition by SS&C, the industry is beginning to see the makings of a major player take shape—known not only for its technology acumen, but also for the breadth of services it can offer and the challenges it is willing to conquer.
While SS&C has sustained its buyer's reputation in the last year or so-picking up not one but two major books of administration business from Citi and Wells Fargo ─ it's fair to say that many in the industry still haven't quite gotten over financial technology's biggest coup in years: Connecticut-based SS&C's purchase of San Francisco's Advent Software in 2015. The combination of East Coast and West Coast mindsets posed many questions, as SS&C, the owner of mainstay fund administrator GlobeOp, took stewardship of the platforms used by most of its competitors. And to ask anyone involved in the deal ─ from SS&C chairman Bill Stone to Advent's senior leadership to many of the users at this year's SS&C Deliver conference ─ those questions were fair.
Among these, the most important question is simple: How would the acquisition make Advent better? Throughout Deliver in San Diego, the analogy was made to one of the California city's favorite sports ─ competitive sailin ─ and in particular the 1983 Americas Cup, when the Australian team won with a new winged keel design, breaking a long string of American victories and setting off a race to technological innovation that continues today.
"There are a lot of parallels to the investment management industry," says SS&C Advent managing director and co-general manager Dave Welling. "You need a great team and a lot of money to win, but none of that guarantees success. You also contend with the environment, with the competition, with the uncontrollable and unpredictable. The winner masters those elements, and can sustain that over the long haul."
Few buy-side technology providers can be likened to a high-speed catamaran like Advent. While the period immediately following the acquisition was a "prove it" stage, working to shore up support among Geneva's major fund administration clients, Advent recognized that the deal would be, as Welling puts it, "a catalyst to wake us up and focus us on what we're capable of" immediately. Already, that has inflected itself on three levels: organization, services delivery and industry posture.
Stone's first look at the company's portfolio revealed top-shelf technology worthy of a headline investment. But some "seemed to be ignored, while others perhaps weren't receiving the investment they deserved," he tells WatersTechnology. The missing ingredient was aggressiveness. "Look at great products like Tamale and Syncova. We thought these weren't the growth drivers they could be; things had become a little decentralized over the years, and could be better, recentralized, with us. For me, it was about simplification and getting comfortable with a little chaos. I speak with the Advent team, they propose an idea, and at some point, frankly, I know enough. Then, it's just ‘go do it.'"
Completely reengineering the Advent organization was the first step in drawing out those ideas, with the advisory business on one side and institutions and alternative asset managers on the other.
"The combination with SS&C just makes new things possible," explains Robert Roley, managing director and co-general manager for SS&C Advent. "Syncova, for example, is really powerful for margin and finance calculation, but had a pretty high bar for client adoption because of the intensive data collection required. With SS&C's fund services already gathering that data for other purposes, it enables us to bring that capability to far more clients as an all-in service. We've found other data integration opportunities, such as with our Primatics Evolv solution for clients managing a loan portfolio, where we're similarly just scratching the surface. Before the acquisition, we struggled at times with turning up new products to talk with clients about. Now with SS&C, the challenge if anything is to narrow down the three or four new solutions or services that are relevant to each one. These are good problems to have."
The technology marriage with SS&C was principally a convenient one. GlobeOp is one of the largest users of Geneva, for example, and a prolific producer of additional tools revolving around the system. Advent had a similar relationship with Citi's fund admin team before it was brought into the SS&C fold. "We knew there would be unease among our existing clients to have their key technology owned by a competitor," says Roley. "But pretty quickly, many of GlobeOp's competitors came to us, looking to integrate certain add-ons-for example, the E-investor documents workflow tool. We were pleasantly surprised."
Operational services, on the other hand, is the area where SS&C could add the most guidance and infrastructural advantage. Shortly before the acquisition, Advent leadership had decided it would expand its Advent OnDemand limited hosting and data management offering after years of wondering if it had the desire to move beyond its tech-first mission. At first, these engagements ─ usually co-sourced arrangements ─ were incremental. Once SS&C came into the mix, however, that jump found a booster rocket strapped underneath. OnDemand morphed into its current iteration, Advent Outsourcing Services (AOS).
"AOS is a great example of the fundamentally different way of thinking that benefits our clients," explains Welling. "With OnDemand, we were really at the high end of the market, but we hadn't truly decided if wanted to be all in. SS&C understands what running an outsourced business process outsourcing (BPO) business looks like, how to leverage to scale and run datacenters all over the world. Running mission-critical business applications with security, compliance and trillions of dollars in client data all pulled in the cloud is a different ballgame. They saw all the potential energy that had been built up within Advent to do this, and gave us the conviction to really pursue it."
An Acquisitive Spirit
Besides shaping how Advent works and what it does, SS&C has also shaped the way Advent thinks. The company's last major acquisition ─ wealth management platform Black Diamond ─ occurred five years ago, and that stands to change under Advent's new bolder posture.
"For advisors, for example, there are a lot of different technology pieces out there, and obviously SS&C has an acquisitive reputation, so some of that is driving our strategy," continues Welling. "We see the opportunity now not only to innovate on our own, but also to be a distributor and simplify the experience through acquisition."
Or as Roley puts it, "The difference now is that we never assume the answer is ‘no.' Before, we were great on big ideas at Advent, but due to resources perhaps less so on the execution. SS&C is definitely about being disciplined, and about the follow-through."
It's a shift in the SS&C mold that Stone is already proud of. "We build software, and we buy companies," he explains. "There's always a risk, and if you lose a deal, you learn from it, dust yourself off and get back in the game. We dwell on our strengths, not our faults. I want Advent to feel the authority to go out and do that. We're cranking up the acquisition engine for these guys."
Indeed, a deal that reshaped the industry isn't done. It's just getting started.