Axxsys joins larger asset and wealth consultancy Alpha FMC
Two consulting firms for the asset and wealth management industry have joined forces. Publicly listed Alpha FMC has acquired Axxsys, a consultancy with around 30 consultants across offices in the UK, Denmark and Canada.
Founded in 2003 in the UK, Alpha Financial Markets Consulting (Alpha FMC) provides independent advice and expert insight to asset and wealth managers, as well as boasts a suite of proprietary benchmarking data and other technology solutions. The fast-growing consultancy went public two years ago, and since then it has been working to expand its operations as quickly as possible.
Earlier in 2019, this saw Alpha FMC launch its new Zurich office to complement an existing hub in Geneva. The firm also established a dedicated Exchange Traded Funds (ETF) & Indexing practice, led by Marc Knowles, based in Alpha FMC’s London office, to respond to the growing significance of both asset classes.
Now Alpha FMC has continued its efforts to spread across Europe and North America with the purchase of Axxsys, a specialist technology and management consultancy with offices in the UK, Denmark, the US and Canada. Established in 2003, Axxsys Consulting is a IT consultancy firm catering to the asset management and hedge fund industry. The firm specialises in business analysis, systems specification and project delivery, with its services spanning from inception to implementation and training.
Axxsys has been set on an expansion track of its own in recent times, adding to its London, Toronto and New York offices with a new Copenhagen location in 2018. The firm followed this up with the appointment of Alix Cheema as its CEO, in order to further pursue growth. With its headcount now standing at 28 employees, Axxsys reported in its most recent accounting year ending December 2018 that its unaudited consolidated revenue stood at £6.2 million.
The acquisition of Axxsys creates additional revenue and brings complementary, technology-focussed service to Alpha’s client proposition, extending Alpha’s service offering to comprehensively cover the SimCorp platform. The move also unlocks cross-selling opportunities and strengthens Alpha’s geographic footprint, particularly in the Nordics and Canada. The deal includes £9 million in cash as a base consideration, payable in installments over the two years following acquisition, plus an earn-out which may be payable in cash after the third anniversary of completion, contingent on Axxsys meeting certain earnings growth targets.
Euan Fraser, Alpha’s Global CEO, commented, “This acquisition delivers exceptional value for both organisations, and demonstrates our focus on continuing Alpha’s growth through highly selective acquisitions, as well as via continued organic expansion. Axxsys brings a range of service propositions and skillsets which are complementary to Alpha. This transaction, which was agreed at an attractive valuation, also strengthens the Group’s global platform for servicing clients in Europe, particularly the Nordics, and North America, with additional offices in Denmark and Canada, and creates a strategic growth opportunity.”
Philip Ritchie, Axxsys’ CCO and Partner meanwhile stated, “This is a highly significant milestone in our company’s history, as we now join forces with one of the fastest-growing and most well-regarded consulting firms in the asset management and wealth sectors. I truly believe in the potential this relationship provides for the development of our business, and that being part of the Alpha Group is the very best place for us to achieve our corporate ambitions in the future.”
The news comes as Alpha FMC has just released its own financial results. The firm’s group revenue increased by 15.1% to £76 million, up from £66 million in 2018, while its adjusted EBITDA increased by 18% to £16.5 million from £14 million last year.
Commenting on the future outlook of the firm, Fraser said, “The Board perceives that the structural drivers in the asset and wealth management industry, in which the Group operates, remain consistent with the previous period: pressure on fees, increase in assets under management and regulatory change. In spite of current geopolitical uncertainty, the Board is confident that Alpha, with its focussed market proposition, is well placed to adapt to its clients’ evolving needs and to deliver ongoing growth.”
