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Silverfleet’s Microgen merges with Touchstone in market-shifting software deal

by The Drawdown 26 November 2019

Silverfleet Capital has backed the merger of portfolio company Microgen Financial Services with Touchstone Wealth Management to create a software provider to the trust and corporate services market with more than 15,000 users, 456 clients and 150 staff.

Microgen was the second investment from Silverfleet’s European Development Fund, a lower mid-market vehicle that sits alongside its flagship buyout fund. The Touchstone merger comes just few months after the acquisition of Microgen in May this year. Deal value was for the merger was not disclosed.

Following the merger Keith Hale, the former chief executive of mutual funds software group Multifonds, will join the combined business as executive chairman. Hale will focus on leading the integration and working with the respective management teams on business development strategy. A new name for the merged company will be decided at a later date, and as the core products of both companies – NavOne and 5 Series – enjoy high installed user bases, both platforms will continue to operate and be supported as normal post-deal.

Silverfleet is no stranger to the fund administration, corporate services and trust business market, having successfully sold alternative assets fund administrator IPES to Apex Group for 3.7x money in June 2018 and also led the primary buyout of TMF. The market has grown rapidly in recent years, as regulation and reporting requirements have increased and capital has flowed into alternative assets.

Specialist software for the industry has become increasingly important for service providers and their clients as they seek more efficient management of increasing reporting and regulatory obligations. Even the largest trust services groups typically do not have sufficient scale or software development expertise to invest in and maintain in-house platforms and have therefore turned to third party providers to meet their technology requirements.

The merger of Microgen and Touchstone creates a global software group in the sector with the size to invest more resources into software development, and positions the new entity to become the largest player in the specialist Trust and Corporate services software market.

This article was originally published in sister title Real Deals.