London-based 3i led a management buyout of SmartStream in 2000 in a deal valued at £122 million, with 3i investing £76 million.

But rumours surfaced in July that 3i was looking to offload its stake in the vendor. The equity group is thought to have approaced Misys twice about selling its stake - most recently in March of this year - for a rumoured £80 million, but the price tag was thought to be too high for the UK software house.

Financial terms of 3i's deal with TA have not been released. In a statement TA says the SmartStream business is an ideal fit for its growth private equity model.

Ron Mackintosh, chairman, SmartStream, says the TA investment is a critical step in executing a growth acceleration strategy and moving to the next stage of the firm's development, which includes a potential flotation.

Smartstream has over 1100 customers, including 75 of the world's top 100 banks which use the vendor's technology to match trades and correct errors during transactions. TA says Smartstream currently has holds a 38% market share.

Earlier this year Smartstream announced 'record' full-year results, helped by strong software licence sales, but did not reveal any figures.

Commenting on the investment, Jonathan Meeks, a principal at TA Associates, says: "In an environment facing increasing regulatory pressure and growing volumes of electronic trading, SmartStream offers financial institutions compelling solutions to control their risk, cost and compliance issues."

As a result of the acquisition Meeks, along with TA Associates principal Ajit Nedungadi, will join the SmartStream board of directors while non-executive chairman Lord Blackwell, non-executive director Mark Austen and CEO Martin Brown will step down.