Bravura Buys MFT

Tony Klim, chief executive officer, EMEA, Bravura Solutions and Bob Milotte, CEO, MFT, talk to GlobalCustodian.com about Bravuras recent acquisition of MFT
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Bravura Solutions, a transfer agency and wealth management software provider, has recently announced that it will undertake a fully underwritten rights issue to acquire Mutual Fund Technologies (MFT), a transfer agency service provider based in Dublin, UK and Luxembourg.

The deal, worth around 19 million, will be the third transfer agency acquisition by Bravura over four years. In 2006 Bravura entered the transfer agency market through the purchase of Rufus, BNY Mellons transfer agency business, bringing in 250 people from the U.S. custodian, and 2008 saw the signing of an outsourcing agreement with Citi for the acquisition of its transfer agency software, which focused on the GTAS platform from Citi Poland.

The MFT deal hopes to build on a profitable transfer agency business. Although Bravuras 2009 financial results show a $4.1 million net loss, the Citi acquisition added $4.9 million in revenue. Our strategy is to increase scale in our transfer agency business, explained Tony Klim, Chief Executive Officer EMEA, Bravura Solutions. Despite some big names in Bravuras transfer agency portfolio Bravura supplies the Rufus platform to BNY Mellon, L&G and J.P. Morgan. Klim is eager to widen market share. [The reason] we were keen to acquire MFT was that it had some blue chip clients, such as Schroders and Invesco, and one of our strategies is to cross-sell our other wealth management products into the transfer agency clients, he said.

Klim seems undaunted to the prospect of adding another platform alongside the existing Rufus and Citi platforms. We are experts in the TA business, and in an ideal world they would all reside on one platform, but we actually get a lot of synergies across the platforms in areas such as product management and regulatory change, he explains. More and more as we go forward we will be trying to develop platform-independent technology that works across various platforms.

Locale also played a factor, as MFT will give Bravura greater coverage in the Luxembourg and Dublin markets. Bravura also spoke to a number of other potential targets, however Klim explains that the MFT acquisition also coincided with their own plans going forward. For Bob Milotte, CEO, MFT: “We have been reviewing options to grow MFT’s business for a couple of years now. Through that process we acknowledged that the best outcome would be to combine with another major player in our technology space. The dialogue with Bravura started from a point of mutual interest and the outcome has resulted in a purchase of MFT by Bravura”.

As part of the transaction, Bravura will acquire MFTs GFAS (Global Funds Administration System) software solution. Before completion, MFT will also enter into service agreements with its existing providers, who will continue to provide a data centre, certain software hosting and related maintenance services, support and back-up to MFT after completion of the acquisition.

There will be no staff changes in the short term. “We spoke with all our staff yesterday morning and they see the logic of this transaction and generally there is a feeling of excitement about the future career possibilities,” explained Milotte.

What we are trying to do is build on our base with the other product offerings we have, concluded Klim. If you move up the value chain from transfer agency, we can provide services the fund supermarkets and wrap platforms, and we can go all the way up to private banking and portfolio management.

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