3i invests USD57m in hedge fund administrator Fulcrum
3i Growth Capital has announced a USD57m investment in Fulcrum, a hedge fund administrator with headquarters in Bermuda and offices in New York, London, Bermuda, Canada, the Cayman Islands, and India, and will install Akshaya Bhargava as the firm's chief executive.
According to 3i, its investment will fund Fulcrum's business growth as well as providing liquidity to shareholders, allowing the to retain its status as an independent administrator at a time when similar companies are being snapped up by global banking groups, while the private equity firm's financial services sector expertise will help boost its growth.
In particular, the injection of financial resources is intended to help Fulcrum continue to increase revenues and profits through an organic increase in funds under administration, new middle-office service offerings, and international expansion into Europe and Asia, building on its reputation for client service, proprietary technology and ability to handle complex products and structures.
'3i's global network, corporate connections, and extensive experience in growing businesses will help Fulcrum achieve its potential,' says Fulcrum's current chief executive Glenn Henderson, who will become chief sales officer in an expanded business development and sales role following the transaction.
'Fulcrum will retain its independence, delivery model, technology platforms and dedicated client team approach, scaling these attributes significantly to continue providing a best-in-class hedge fund administration service.'
Whitney Bower, a partner with 3i Growth Capital, says: 'Our heritage is in growing significant international businesses, so we are thrilled to have the opportunity to build a differentiated company in a large and growing market. Fulcrum has an attractive business model, a superior-quality proprietary technology platform, the ability to support hedge funds' complex strategies, and personnel in place to advance operations.'
Bhargava, who has been working with 3i for a year and has identified and led two business process outsourcing investments, has extensive experience in financial services and a strong track record for growing companies in the outsourcing industry.
He was previously chief executive of Progeon, India's seventh largest outsourcing services company and a subsidiary of Infosys, which he grew in less than four years from a start-up to a company with USD86m in revenues, more than 7,000 employees and 22 Fortune 500 customers. He earlier spent 22 years with Citibank in India, the Czech Republic and the UK.
'Fulcrum is an established outsourced service provider of fund administration and middle office services and has built high-quality delivery capacity for new business with production offices in Canada and India,' Bhargava says.
'I feel that Fulcrum is one of the most exciting companies on the market, and 3i will be instrumental in leveraging this investment by drawing on our direct management expertise and global footprint to augment and expand Fulcrum's service offering in Europe and Asia.'
3i, which brings a strong track record in financial services knowledge and outsourcing expertise from its previous investments in Kneip, Travelex, Asia Capital Re, Bouncopy and Williams Lea, focuses on buyouts, growth capital, venture capital, infrastructure and quoted private equity in Europe, the US and Asia.
3i Growth Capital is the world's largest growth capital fund, investing more than EUR1bn annually in businesses worldwide, typically investing between EUR10m and EUR250m to help businesses achieve growth, restructure shareholdings, release equity or change the balance of equity to debt. Recent investments include USD200 m in ACR in Singapore, EUR185m in Delta Hydrocarbons in the Netherlands and USD45m in India's Navayuga Engineering.
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