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Citi, State Street Join FundGuard Platform as Part of $40 Million Funding

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Citi and State Street Corp. have joined existing investors in FundGuard’s $40 million Series B funding round, becoming strategic partners in the company’s bid to establish a SaaS-based investment management and asset services platform. With ‘anchor tenants’ Citi and State Street on board, FundGuard is now launching efforts to add more specialised providers of capabilities geared toward boosting efficiency and performance of its buy-side clients.

FundGuard is building an AI- and cloud-based global asset servicing utility that ultimately will offer investment management firms and asset servicers a broad range of functions, spanning accounting, risk, portfolio allocation and portfolio analytics. The latest funding round sees join initial investors Blumberg CapitalLionBird VenturesTeam8 Capital and others, and brings to $55 million the total capital invested in the company.

According to John Lehner, the former State Street and BNY Mellon executive who last year joined as FundGuard’s president, “By harnessing the cloud and AI, our technology enables our clients to be more cost effective and offer new and innovative products at scale. This new investment will allow us to accelerate our growth and continue to attract top talent so that we can meet the demand we are seeing from asset managers and service providers who realize their legacy technology, simply put, costs too much and can’t do what they need it to do.”

FundGuard aims to put in place a single platform that can host key functions for buy-side firms and their service providers. “Our aim is to boost transparency and create unparalleled scalability for our clients,” Lehner says. “Asset managers, banks, services providers and fund administrators are all getting larger and need help to optimize processes as they scale. FundGuard helps these firms modernize across their operations, from accounting to risk and allocations, through to portfolio modelling and analytics, all underpinned by a trusted, single source of data.”

Unlike other initiatives that have seen portfolios of capabilities built or acquired by a single commercial entity, FundGuard is pursuing a utility model that will allow multiple service providers to offer capabilities through its platform. “We can’t do it alone; we can’t do it with a proprietary vendor approach,” says Lehner. “We are taking an industry utility approach, starting with accounting and data issues, to create a common technology platform for investment management lifecycle components.”

In this scenario, the addition of Citi and State Street as strategic investors is paramount. Says Lehner: “In the mall analogy, the major investors are the anchor tenants. We are now setting about adding more specialized providers – in risk, attributions and so on – to offer core capabilities based on the same technology infrastructure and the same data standards.”

Okan Pekin, Citi’s Global Head of Securities Services commented: “We are thrilled to partner with FundGuard as they have built an attractive investment servicing platform that complements our vision to leverage cloud technologies to unlock the power of data for the benefit of our clients.”

John Plansky, Head of State Street Alpha, said: “We are excited to partner with FundGuard and its comprehensive, cloud-native accounting platform to support our Alpha strategy.”

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