Flexstone, the private equity co-investment specialist firm, has taken stakes in companies operating in the wealth management and technology sectors.

Flexstone, an affiliate of Natixis Investment Managers, invested $10 million in Syniti.

Based in the Boston area, Syniti helps Fortune 1000 companies address their complex data challenges including data migration, quality control and data harmonizing, data protection and governance, and master data management through a continuum of software and services offerings.

The $10 million co-investment was made alongside Bridge Growth Partners, a private equity fund focusing on mid-market technology companies. This was Flexstone’s second investment alongside Bridge Growth Partners

Enterprise data is a great market to get into,” says Clément Rivière, Senior Vice President, Investments, at Flexstone. “Most corporate problems today are data-related and strong M&A trends are also driving the demand for data management.” Enterprise Data Management is a $40 billion-plus a year market, with a compound average growth rate of 10%.

Syniti has a strong relationship with Germany’s SAP, the world-leading ERP provider. As SAP migrates to a new version of its software, this will generate a wave of data migration and demand for Syniti products and services.

The deal may provide an opportunity for an early exit. Since Bridge Growth Partners first invested in Syniti in 2017, it has (i) replaced the senior management team and built a strong Board of Directors with tremendous prior experience in Fortune 500 companies, (ii) deepened its relationship with SAP, (iii) entered into several global reseller agreements, and (iv) transitioned its product to the cloud. Syniti has also spent over $50 million building its data technology platform over the past 10 years, compared with the industry average of $1 million-$2 million. “The company is well placed for strong growth in the near term and given the heavy lifting already done by Bridge Growth, the company may reach our expected valuation in a much shorter timeframe than is usual in private equity,” Rivière adds.

Flexstone also invested $20 million in Parmenion, a UK provider of technology solutions and services to wealth advisers.

There are already more than 1,500 wealth advisory firms using Parmenion’s platform. The technology behind the platform is proprietary and has been rated #1 or #2 by Platforum, a research company, in every quarter since 2016. Parmenion has produced revenue CAGRs in excess of 20% since 2017, substantially outperforming the market.

The injection of capital will help Parmenion make bolt-on purchases in a fragmented market that has considerable room for consolidation.

The transaction is complementary from a diversification point of view,” says Naim Weydert, Vice President, Investments, at Flexstone. “It’s the first deal for us in wealth management. It is squarely within the sweet spot of the lead sponsor, which specialises in the financial services sector.

Exit possibilities for Parmenion include an IPO, a strategic sale to a larger investment platform or, as it grows, a secondary market sale to a private equity firm focusing on larger-size deals.

For Further Reading:
Flexstone Partners
An affiliate of Natixis Investment Managers

Flexstone Partners, SAS – Paris
Investment management company regulated by the Autorité des Marchés Financiers. It is a simplified stock corporation under French law with a share capital of 1,000,000 euros Under n° GP-07000028 –Trade register n°494 738 750 (RCS Paris)
5/7, rue Monttessuy,
75007 Paris

Flexstone Partners, SàRL – Geneva
Independent (unregulated) asset manager, under Swiss Federal Act on Collective Investment Schemes (“CISA”), supervised by Commission de haute surveillance de la prévoyance professionnelle (“CHS PP” and regulated by the Swiss Financial Market Supervisory Authority (“FINMA”) under Anti Money Laundering requirements. It is a limited liability company with a share capital of 750 000 CHF.
Trade register n° CH-660-0180005-1
8 chemin de Blandonnet
Vernier 1214 Geneva

Flexstone Partners, LLC - New York
Delaware corporation, registered with the United States Securities and Exchange Commission as an investment adviser
28th floor of 745 Fifth Avenue, New York, NY 10151.

Flexstone Partners, PTE Ltd - Singapore
61 Robinson Road, #08-01A Robinson Centre
Singapore 068893

Natixis Investment Managers
RCS Paris 453 952 681
Share Capital: €178 251 690
43 avenue Pierre Mendès France
75013 Paris

This communication is for information only and is intended for investment service providers or other Professional Clients. The analyses and opinions referenced herein represent the subjective views of the author as referenced unless stated otherwise and are subject to change. There can be no assurance that developments will transpire as may be forecasted in this material.

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