SS&C will expand its suite of risk analytics and regulatory offerings via the acquisition of Algorithmics’ assets.
SS&C Technologies (SS&C) will be acquiring the risk analytic products and services of Algorithmics from IBM via a definitive agreement that also includes more than 200 clients, 350 employees and offices in 25 countries.
The deal will facilitate SS&C’s expansion of its risk management and regulatory compliance offerings, officials say. The cloud-based technology of the Algorithmics suite will allow for integration within SS&C’s platform and the addition of micro-services.
In fact, the union with SS&C will “accelerate delivery of all solutions on the cloud and provide thought leadership in risk management,” according to a statement from Mina Wallace, who once the acquisition closes, will become senior vice president and general manager at SS&C Algorithmics.
The solutions and technology from Algorithmics target market, credit and liquidity risk, and capital management. In particular, the Algorithmics solution suite provides support for x-value adjustment (xVA), the fundamental review of the trading book (FRTB), standardized approach for counterparty credit risk (SA-CCR), current expected credit losses (CECL) and targeted review of internal models (TRIM), officials say.
Bill Stone, chairman & CEO, SS&C
“The companies we serve face a rapid pace of regulatory change and increasing need for integrated real-time and predictive analytics,” says Bill Stone, chairman and CEO of SS&C, in a prepared statement. The addition of Algorithmics will help SS&C’s clients “navigate enterprise risk successfully,” Stone adds.
SS&C officials say the acquisition is slated to be completed during the fourth quarter of this year after the completion of customary closing conditions.
“The acquisition of IBM Algorithmics’s assets will extend our capability across our financial services customer base,” Mike Megaw, managing director at SS&C GlobeOp, tells FTF News. “Algo Risk for Insurance enhances our middle and back office software and services for insurance companies.”
The regulatory support aspects of Algorithmics will extend SS&C’s regulatory and analytics offerings for Solvency II, a European Union directive to codify and harmonize European insurance regulation; a new accounting standard, Current Expected Credit Loss (CECL); and other regulatory requirements, Megaw says.
“Algorithmics will also be integrated across a host of SS&C front-office products, offering enhanced capability in portfolio construction and risk management,” Megaw adds.
SS&C officials decline to comment upon the cost of the acquisition or whether there will be layoffs once the transaction has been completed.
The Algorithmics announcement follows by only weeks SS&C’s news that it had entered into a definitive agreement to acquire the Investrack digital customer management solutions business from UAE-based Globacom Technologies. That transaction is expected to close this month.
Before the acquisition, SS&C already had a long-term partnership with Globacom, and Investrack’s tools and services have been integrated with SS&C’s solutions such as APX, Tradex, Geneva and Moxy.
When the transaction closes, Investrack will be a business unit under SS&C Advent with 29 employees based in Dubai and Pune, India, servicing 30 clients in 14 countries. The leadership team, including CEO Vijay Kartha will report to Mats Berggren, head of International business development of SS&C Advent.
Stone recently addressed the company’s acquisition strategy, saying that its client base has grown and diversified. His comments came at the start of the annual SS&C Deliver 2019 client conference, which ran from Sept. 17 to 19 at the Gaylord Palms Resort in Orlando, Florida.
SS&C buys companies in response to what its clients need, Stone says. The company has built many products, but technology development takes a long time, and many initiatives have resulted in products that are now defunct or never saw the light of day, he adds.
Looking forward, Stone notes that the company expects to invest from $400 million to $5oo million in R&D this year and further its “follow the Sun” strategy, building a global presence that allows clients 24-hour access to services, support and expertise.
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