Nordic Capital Fund VIII “Nordic Capital” and MFEX management has signed an agreement to acquire the majority of the shares in MFEX, a leading European B2B open architecture fund distribution platform.
Nordic Capital sees great potential in supporting the acceleration of MFEX’s growth agenda across Europe and Asia and the consolidation in the sector.
MFEX is a leading B2B open architecture fund distribution platform with EUR 72 billion of assets under administration as of July 30, 2017. MFEX provides infrastructure for mutual fund distribution, facilitating access between fund companies and distributors. The Company is one of the largest independent fund platforms in Europe, connecting over 800 fund companies from 40 legal domiciles to over 100 distributors from 30 countries. MFEX was founded in 1999, is headquartered in Stockholm, and has offices in Paris, Geneva, Singapore and Umeå.
Nordic Capital had followed MFEX’s development for some years, which after contacts with management and key shareholders, subsequently led to a primary buyout together with management.Going forward, Nordic Capital will support MFEX’s continued growth by investing in the organisation and its product offering. The Company’s growth potential is underpinned by strong underlying market growth, accelerated by an increasing regulatory focus on transparency, and a shift towards open architecture platforms. MFEX holds a strong market position, as evidenced by several notable contract signings with global financial institutions over the last few years, and is well positioned to benefit from the supportive tailwinds in the market.
As part of the transaction, Nordic Capital is injecting substantial equity into MFEX to position the Company as a natural consolidator of the fund platform industry in Europe and Asia. In addition, MFEX will benefit from Nordic Capital’s significant industry expertise and long history of successful growth oriented investments, in order to pursue its growth strategy.
“MFEX already has a strong platform for driving growth and the potential to become a global leader. It is well established as a high quality independent alternative in the European and Asian markets, and ranked highly by market participants for its quality of service, high flexibility, technical innovation and transparent pricing model. We share management’s ambition to leverage its attractive value proposition. Nordic Capital has a long history and proven experience in growing businesses within the financial services sector and looks forward to supporting the management team in building a pan-European leader in fund distribution services,” says Christian Frick, Partner, NC Advisory AB, advisor to the Nordic Capital Funds.
“We are delighted to partner with Nordic Capital to take MFEX to the next level. Market participants, distributors and fund companies alike tell us they need more transparency and independent providers with no conflicts of interests. This is exactly what MFEX stands for,” says Olivier Huby, Co-CEO of MFEX.
Oliver Lagerström, Co-CEO of MFEX, adds “By teaming up with Nordic Capital we get support to leverage, and further develop our leading fund distribution technology. With MFEX’s passion to combine transparency and technology we have modernised the industry and experienced strong organic growth. We are pleased to welcome Nordic Capital and we look forward to together continuing our transformation of the fund distribution proposition and undertaking M&A as a driver to expand in Europe and Asia.”
The financial services sector is a core investment vertical for Nordic Capital. Supported by its industry-leading advisory financial services team, Nordic Capital has in 2017 to date completed the take private of Nordnet, a publicly listed pan-Nordic digital savings platform, and the combination of Lindorff with publicly listed Intrum Justitia to create the industry leading provider of credit management services. The acquisition of MFEX further bolsters the high level of transaction activity that the Nordic Capital Funds have achieved since the beginning of 2016, with twelve successful exits and six new completed platform investments.
The parties have agreed not to disclose the financial terms of the transaction.