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Big Changes on the Cards for Netik?

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Earlier this week, we revealed that Netik’s founder and CEO John Wise has exited the building and has been replaced by ex-global head of Autobahn Equity at Deutsche Bank Rob Flatley. This, in turn, follows the departure of long time Netik exec Keith Hale last month, who joined IGEFI Multifonds as its new global head of transfer agency. However, this is not the last of the people moves on the cards for the vendor this year, as Netik’s current president Colin Close will also be leaving the firm within the next couple of months.

What impact will these departures have on the data management outsourcing solution vendor’s future, given that these three execs have been such an integral part of the firm’s strategic direction?

Since its acquisition of the Capco Reference Data Services (CRDS) business back in February 2008, the vendor has been putting a major part of its efforts into integrating the hosted securities reference data solution into its overall managed services portfolio. This resulted in the release of the revamped Global Securities Master (GSM) solution in September last year with a purported added level of control for users in the form of the Netik Container component. The vendor then saw the first major client win for the solution at the start of this year in the form of a large unnamed US West Coast asset management firm.

When I spoke to Hale, Close and Wise in January, all were upbeat about the prospects for the business in light of this new client win and the interest being displayed by the buy side community for outsourced solutions. In terms of revenue breakdown, the vendor is seemingly still relying on its traditional outsourcing business segment for the lion’s share of its income. Netik’s current revenue breakdown in terms of its three main solutions is: 20% from the exchange traded fund (ETF) and index data aggregation offering; 30% from GSM; and 50% from its more traditional outsourcing business.

However, the exit of Hale and Close in particular is a fairly significant event for the firm, given that both have assumed very public profiles by regularly speaking at events such as FIMA and championing the cause of data management outsourcing within the vendor community. Close had also recently relocated from London to New York and was due to bolster the vendor’s US efforts, but will likely have limited time to make an impact before he leaves the firm.

Netik under the leadership of Flatley and without the influence of its founders and longstanding execs, will likely see some degree of change in terms of approach. Andy Eckert, general partner of Symphony Technology Group, which owns the vendor, noted this week that his appointment is a “milestone in the evolution” of the vendor, but exactly how this evolution will take shape is not yet clear.

Flatley is certainly no stranger to the world of data management: he was senior vice president of global sales and marketing at GoldenSource’s forerunner FTI. Most recently, however, he has been ensconced in the front office world in electronic trading for Deutsche Bank. Perhaps he will seek to bolster Netik’s success in the ETF world, given the rise in interest in this space? He could also add a more market data focused spin on the GSM solution, much the same as software data management solution rival GoldenSource’s efforts with Xenomorph. The next few of months will give some indication of what’s on the cards for the vendor in the long term.

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