Financial services consultancy Catalyst secures Livingbridge investment

17 October 2017

Financial services consultancy Catalyst Development has secured a growth investment, in a management buy-out backed by private equity investor Livingbridge. The deal was advised by Livingstone’s Business Services sector team.

Private equity firm Livingbridge has made a “significant” investment in financial markets consultancy Catalyst Development. Founded in 1994, the firm has served more than 70 clients in over 30 global financial centres, including names as big as JP Morgan and HSBC over its time in business. Over their 23 years in the industry, Catalyst have advised on regulatory change, organisational improvement and talent development in investment banks, clearing houses and asset managers.

Financial service advisory is a hugely lucrative business at present. Global banks spent about $30 billion on consultancy fees in 2016, up from $17 billion in 2008. Client demand for Catalyst’s specialist services is significant, driven by far-reaching G20 commitments to making markets safer in the wake of the financial crisis. Catalyst’s clients are now increasingly requiring ‘specialism at scale’ to tackle large, complex programmes of transformational change. With a number of UK and EU-driven changes, to regulation on the horizon, such as Mifid II and GDPR, investors also clearly subscribe to the belief that Catalyst looks well-placed for rapid growth.

Specialist financial services consultancy Catalyst Development secures Livingbridge investment

Catalyst CEO, Andrew Middleton commented, “Since the financial crisis, there has been a growing need for expert, trusted advisors to help financial institutions navigate change. Our ambition is to become Europe’s leading financial markets specialists. In Livingbridge, Livingstone have identified an ideal partner for us who will enable us to build on the momentum we have already generated and accelerate our growth to establish Catalyst as the unrivalled choice for specialist financial markets consultancy.”

Livingbridge are a mid-market private equity firm of over 80 people in the UK and Australia. Globally, the private equity industry now has over $2500 billion in assets under management, and Livingbridge’s website boasts that they hold as much as £1 billion, which is ready to invest over the next 5 years. The investment from Livingbridge, who invest between £2 million and £70 million in fast growing companies, will enable Catalyst to address its market’s escalating requirements along with growing its client base, by accelerating its service development, expanding its talent development and acquisition strategy (with the aim of trebling headcount) and strengthening its infrastructure. Catalyst also aim to increase its international presence, and Livingbridge has committed to provide additional capital to pursue strategic acquisitions.

The investment was advised by Livingstone. The firm is an international mid-market M&A and Debt Advisory firm, with offices in Beijing, Chicago, Düsseldorf, London, Los Angeles, Madrid and Stockholm. Its 110 professional staff completed over 60 deals in 2016, alone. Their credentials in the specialist consultancy space include sale of Technicon Design to French engineering group Segula Technologies, Tata Technologies’ strategic acquisition of Escenda and the sale of Javelin Group to Accenture.

Alex John, Partner at Livingstone London, said, “The Catalyst team are one of the most impressive management teams we have worked with, and have developed an excellent reputation for deep subject matter expertise and service delivery. There is a clear market opportunity, and with the backing of Livingbridge, we are confident they will build a highly attractive specialist consultancy of genuine scale.” 

Greg Davis, Founder and retiring Chairman of Catalyst, concluded, “Livingstone quickly grasped the nature of our business, what makes it desirable and what future ownership we needed to fulfil our ambition. They ran a disciplined and highly professional process and attracted several good trade buyers and private equity investors. Even more importantly we trusted Livingstone to help us decide on the best partner for Catalyst going forward. Their outstanding advice and professionalism have been invaluable to the success of this process.”

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Accenture's push into the creative sector is an identity crisis

18 April 2019

In its latest push into the creative sector, Accenture Interactive acquired New York and London-based ad agency Droga5 earlier this month, adding illustrious clients such as HBO, Amazon and The New York Times to its roster of clients. With the latest in a long line of similar purchases, Accenture Interactive further demonstrated its ambition of becoming the globe’s leading trusted advisor to chief marketing officers. Yet according to Ben Langdon, Chairman of Class35, Accenture’s strategy may be heading in the wrong direction.

A press release on Accenture’s website announcing the acquisition sits next to a quote stating that “brands aren’t built through advertising” – a huge contradiction from a consultancy firm hell-bent on becoming the ‘CMO agency of choice’. It’s not alone of course. The entire consulting industry wants a piece of the creative pie right now. In addition to Accenture Interactive, recent acquisitions by PwC Digital, IBM iX, and Deloitte Digital meant that in 2017, for the first time ever, four of the world’s ten largest creative agencies were consultancies.

So just what it is that Accenture wants to achieve from this? For one thing, it’s clearly trying to be a digital transformation business. A one-stop creative shop rivalling more traditional models, it wants to lure CMOs in with the promise of lower ad spend and a “more impactful customer experience”. At the same time, though, it’s still in thrall to those same slinky, shiny branding and advertising agencies it’s attempting to disrupt. The Droga5 acquisition and that of Karmarama a few years before are both testament to this.

There’s a fundamental problem with this, though. Digital transformation businesses don’t sell to CMOs. These people have enough on their plates trying to transform their own marketing skills in order to keep up with an ever-changing market – they just don’t have the time or the energy to concern themselves with digitally transforming a whole business. If Accenture’s purpose is digital transformation, then going after creative agencies is barking up the wrong tree.Is Accenture's push into the creative sector an identity crisis?

Worlds apart

Perhaps more importantly, these two industries are worlds apart in terms of the way they think. Creative agencies are all about ideas, campaigns and consumers. Digital businesses, on the other hand, are customer-driven – they think in terms such as lifetime value, measurement, and efficiency. Customer-led thinking is an entirely different beast to consumer-led thinking.

The reality is that the arrival of digital and an all-encompassing obsession with technology, measurement and social has led to the death of agencies in a reductive, zero-sum, efficiency-focused battle with brands. Indeed, agencies have become so obsessed with the latest tech fads, they’re beginning to forget how brands work. Worse still, they’re beginning to forget how brands are built. And, by forgetting, they’re destroying their own values.

Killing creativity

All things considered, it really feels to me as though Accenture is a chip leader in a game it doesn’t understand. Expensive acquisitions like these show that they’ve got the big money, but they don’t appear to have any idea what they’re doing with it. Take talent, for example. The best talent in the creative industry right now is out in the market; it’s not tied to any one agency. Both agencies might well be at the top of their game, but why would a consulting firm waste so much money on buying them when they could hire high-quality creative talent on a contingent basis instead?

As their presence in the top 10 creative agencies shows, there is a growing trend in which Accenture, like many of the other big players, are buying up agencies as if they were nothing more than keywords. What they’re really buying, though, is a collection of credentials, clients and IP. Unfortunately, the talent that created those credentials aren’t going to stay at the business, the clients that hired the agency in the first place won’t be interested in buying what is basically just another part of Accenture, and the IP never really existed to begin with.

Droga5, for example, was one of the few agencies that did great brand work the old-fashioned way – undoubtedly something that made it attractive to Accenture in the first place. The irony, though, is that by leading it further away from the way of working that made it so special, the consulting giant will kill its creativity.

“Accenture Interactive has been dazzled by its ambitions to become the CMO agency of record…. But, in flashing its cash, it is spending millions on acquiring nothing of any value.”

If pressed, the recently acquired agency staff at Accenture will tell you just how dysfunctional the new arrangement is. They’re largely unfulfilled. Rarely do they feel their work has any sort of meaning or purpose. What’s more, the different disciplines have found little or no common ground, and find it hard to work together as a cohesive whole. It’s not surprising, then, to see talented people leaving in droves.

Beyond the window dressing 

It’s clear, then, that consulting firms and creative agencies are no easy bedfellows. But in his company’s defence, Accenture Interactive’s Senior Managing Director for North America, Glen Hartman, described its culture as being “far, far away from what a stereotypical consulting firm would look like. Our office and studios look a lot like Droga5’s.”

In demonstrating a belief that office design equates to workplace culture, this statement serves as an illustration of how confused Accenture is right now. It wants to justify its new strategy so badly, it’s started dressing like a creative agency. But if you look beyond the window dressing and see that you and your partners are speaking a different language with a different purpose, selling to different people in a different market, there’s no getting away from the fact that you’re different.

Accenture Interactive has been dazzled by its ambitions to become the CMO agency of record, and it wants to dazzle others with its new direction. But, in flashing its cash, it is spending millions on acquiring nothing of any value.

Related: Space between consulting firms and creative agencies is converging.