We’re seeing mergers, acquisitions and partnerships in the platform technology market across Europe and the UK.
Some pretty mind-boggling numbers are being thrown around in the European platform market. Allfunds’ platform will administer half a trillion euros of assets after its recent acquisition of Nordic Fund Market and its deal with Credit Suisse InvestLab. MFEX’s platform comes in second place with over €250bn following its purchases of Axeltis in France, Ahorro Funds in Spain and RBC I&TS’ Global Fund Platform – along with its deal with Société Générale.
By the end of 2017 the top 10 had a market share of 56%, according to our latest report on European platforms, which covers 75 B2B platforms. This proportion rose to 61% by the end of 2018 and will stand at around two-thirds once all the current transactions make their way through their regulatory approvals.
In the UK, the market remains fragmented, despite much talk of platform consolidation over the years. The UK market comprises about 30 B2B platforms and a similar number of D2C/B2C, depending on how you count. Despite a few acquisitions here and there, with Zurich’s platform being the latest offering on the market, the number of platforms has remained remarkably stable for the last decade. Where we are seeing movement is in the underpinning technology – platforms have been gradually shifting onto four main technology providers.
FNZ announced its acquisition of GBST this week. The bidding war was initially kicked off by Bravura, with SS&C also joining in. The fact that all four of the UK’s major platform tech providers were involved – and the high premium over GBST’s share price before the bidding started – points to the frenetic race for market share in the platform tech market. FNZ also acquired JHC in July.
Allfunds, FNZ and MFEX are all private equity backed. Technology is a favourite for PE firms, and ‘wealth’ is a growing market. Combine these factors with the large amount of PE ‘dry powder’ around, and we’d expect this consolidation to continue.
We’ll be covering the continuing evolution of the platform market at our annual conference on 2nd October, along with other trends and developments affecting fund distribution across the UK and Europe. To register or for more information please click here.