In May 2022, after more than 30 years in the data management market, GoldenSource was acquired from previous equity investors by middle-market private equity firm Gemspring Capital. The acquisition marked a step-change for the company, with its agenda now including cooperation with Gemspring on core operations such as products, managed services, development, and sales and marketing to accelerate growth, a review of product strategy including an M&A programme, and a drive to optimise the business and improve it to run as ‘the best company’ it can be.
The M&A programme is, perhaps, the most striking change after years of organic development. “This is a significant emphasis for GoldenSource now we have the backing of new private equity,” says Eley. While no mergers or acquisitions have yet been made, targets have been set with the company looking at competitors that would help it scale and add product opportunities, mergers with similar companies but with different client segments, and companies with large product adjacencies that would expand the GoldenSource product set.
“Financial services firms face challenges in data management, analytics and reporting,” says Eley. “We solve these problems well and efficiently, but clients have other issues and at the same time want to work with fewer vendors. GoldenSource can help here.”
The company’s proposition is to continue to deepen its focus on the practice of data management, which was originally dedicated to the sell-side, but has since been extended to the buy-side, and add customer required components. One such is the recently released GoldenSource IBOR, a real-time investment book of record that combines with the company’s GoldenSource Nexus data warehouse platform to provide a responsive intra-day IBOR that automatically links positions data to all other investment data of GoldenSource clients.
More on the buy-side
Jeremy Katzeff, head of buy-side solutions at GoldenSource, says firms are looking for better data quality to drive decisions, have a desire to consolidate vendors, and are nurturing the rise of citizen developers. He says: “To meet these needs we need to provide a modern data stack that ingests data using open source tool kits, uses classic EDM capabilities to manage and master data, and integrates with cloud-based data warehouses such as Snowflake and Databricks.”
Last year, GoldenSource increased its commitment to cloud integration with cloud data services that help capital markets participants manage data into and within data lakes and warehouses. These include data management infrastructure services that provide data pipelines and cloud-ready data schemas, enabling users to harvest data for their data lakes in a more efficient and beneficial way. Core to the GoldenSource offering is the company’s cloud data model, which can be embedded in any cloud data warehouse or lake, providing immediate structure in what would otherwise be a disorganised data swamp.
Katzeff comments: “Our focus is on what customers need. They don’t necessarily want master data management or EDM, but they often have the same issues around centralising data and achieving data quality. This is not necessarily an EDM platform sale, but a solution for wider issues with a data management element such as regulatory reporting, or ESG data management.”
ESG
GoldenSource solutions are a good fit for ESG data management, and the company is investing here and having some success. Its products include ESG Impact, which is based on the company’s established data management capabilities and designed to provide ESG data coverage, comparison, quality checks, and portfolio screening. The company is also working with a growing number of data vendors to understand their materiality maps and use its data model to correlate data at intake and make ESG data, such as scores, ratings and metrics, comparable and therefore useful to investment decisions and strategies.
GoldenSource has several customers in production with its ESG solutions and is making technical investments to link cloud data warehouses such as Snowflake and Amazon Redshift into its technology stack.
Market data replatforming
On the sell-side, GoldenSource is responding to client demand for market data centralisation and solutions for use cases from FRTB regulatory compliance to market risk, valuations, and integration with quant libraries. The driver is cloud.
Charlie Browne, head of market data and risk solutions at GoldenSource, says: “Banks, particularly on the risk side, have been late to move to cloud because of data sensitivities and regulatory concerns. The trigger for replatforming is whether firms have the right solutions and vendors in the right place. This is leading to more projects for market data platforms.”
Again, this plays into the company’s EDM capabilities with market data platforms taking in data from many sources and requiring functionality such as cleansing, normalisation and lineage.
Like Katzeff, Browne says: “This is not just EDM – it is EDM and best practice around issues such as risk management.” He adds: “Clients can do analytics on platforms such as Snowflake, but they get better service and data quality if data is put through the EDM platform first to create golden copies.”
The statistics
With towards 60 clients worldwide, about 60% on the sell-side and 40% on the buy-side – although the company has sold more to the buy-side over the past couple of years, two record years in 2021 and 2022 in terms of revenue, margins, and total managed services clients, and similar growth expected through 2023, Eley concludes: “There are lot of market trends in our industry that are in our favour and good for GoldenSource.”
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