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Markit Moves into the Front Office through Acquisition of thinkFolio

Markit’s acquisition of London-based portfolio management software specialist thinkFolio marks the company’s first move into front-office solutions, although it is not expected to be its last.

The deal closed yesterday and while Markit declines to detail the cost of the acquisition, it has confirmed that thinkFolio’s 20 employees will transfer to the company, along with CEO and founder Andrew Walsh. Walsh will continue to lead the thinkFolio business, which will soon be rebranded under the Markit banner, and will report to Daniel Simpson, managing director and head of enterprise software at Markit.

As well as thinkFolio’s software and employees, Markit has acquired about 50 thinkFolio customers. Most of these are in the UK, with a few in North America and Asia, and around 12 are already Markit Enterprise Data Management (EDM) customers. Simpson says there will be no adverse changes for thinkFolio users in terms of the quality and timing of releases, and hopes, instead, that the acquisition will enhance the software and its support. The thinkFolio software comprises order management, portfolio modelling, compliance and cash management capabilities for the cash and derivative markets across multiple asset classes including bonds, commodities, equities and foreign exchange.

Markit’s first foray into the front office builds on its strength in the middle and back office markets, to which it offers Markit EDM, Markit Analytics enterprise risk management software and Markit WSO loan portfolio software.

Simpson explains: “We had no penetration in the front office and that is what we were looking for. There are only a handful of independent portfolio management software vendors in the market and thinkFolio stood out. We have worked with the company for four or five years and its software is integrated with Markit EDM and some Markit data services, such as transaction cost analysis and iBoxx fixed income indices. We also knew the team well, understood the business model and were attracted by the software’s strength in complex asset classes and its light footprint, which makes it easy to deploy and fast and cost efficient to use.”

While Simpson acknowledges that Markit’s enterprise software solutions are designed to work on a stand alone basis, or interoperate or integrate with solutions from other vendors, he adds: “This acquisition expands Markit’s technology offering for the front office and enables customers to source order management and portfolio management software as well as enterprise data management, transaction cost analysis and risk analytics from a single provider.”

For thinkFolio, which was previously privately owned by shareholders and staff, the acquisition is expected to act as a springboard for growth. Walsh says: “Our experience of working with Markit on product integration has been extremely positive and gives us confidence that we will thrive as part of the company. Markit’s global reach will take our product to the next level and help drive our mission of providing a first class product with excellent customer support.”

Markit plans to integrate thinkFolio into its enterprise software division over the next three to six months, but with an acquisitive nature it is unlikely to stop there and other front office targets could be in its sights. Meantime, on the subject of an IPO, the company refuses to be drawn beyond an official statement saying: “We continue to consider our options, but a decision has yet to be made.”

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