Microgen Financial Systems and Touchstone Wealth Management, two of the leading providers of technology to the Trust, Fund and Corporate Services market are to merge, in a market-shifting software deal.

The announcement was made to the staff of both companies and their key clients on Friday 22 November 2019 and a press release issued on Monday 25 November.

Microgen and Touchstone have been keen to reassure clients that they will absolutely continue to focus on the delivery of their existing product roadmap, projects and support services. More importantly, they will continue to invest in product development and will have the scale to accelerate innovation to improve their ability to adapt to changing market dynamics and remain resilient at a time of rapid change. As a result of their new scale, reach and combined talent, they say they will be able to provide more services and develop new functionality to work with their expanding portfolio of products, including Microgen’s 5Series and Touchstone’s NavOne.

Silverfleet Capital

This move follows the acquisition of Microgen Financial Systems, from Aptitude Software Group, by Silverfleet Capital in July 2019. At the time Silverfleet stated they would be continuing to invest in the sector. The backing of this merger means that the combined company will now have the largest market share. Previously this position was occupied by ViewPoint Software for Business, who had the largest installed base of the three major players in this market. (See my earlier article for a review of systems in this market.)

Microgen and Touchstone have a combined client base of about 15,000 users and 500 clients.

The announcement also notes that Keith Hale will join the new company as Executive Chairman to lead the merger and future strategy. Keith brings a wealth of experience, most recently as CEO of Multifonds, a leading software provider in the adjacent fund administration sector. Keith successfully led Multifonds through a period of rapid growth leading to its sale to Temenos in 2015.

Robert Browning and Peter Le Brocq both continue as heads of Microgen and Touchstone respectively, with seats on the combined company board. No other changes are known at this time.

The transaction is subject to competition authority clearance which is expected to take up to five weeks.

I believe this is excellent news for the wealth management sector. It is a sector that is ready for disruption, but none of the existing businesses had the scale or capacity to achieve this. With Silverfleet’s investment, the combined strength of Microgen and Touchstone will be a force to be reckoned with.

I will continue to monitor both companies and publish any further news as it becomes available.

Microgen Financial Services

Previously part of Aptitude Software Group (renamed from Microgen plc in March 2019), Microgen Financial Services is headquartered in Fleet, UK. They have subsidiary offices in Cambridge, Guernsey and Cyprus. Total staff is about 100.

Microgen’s flagship product is 5Series which is aimed at trust administration, corporate services and fund administration businesses. The core market for these products is the offshore financial services sector.

Microgen also own a number of other software products, acquired in recent years including Jobstream, 4Series, Alchemy, Elements, Primacy, Quorum and G3.

Touchstone Wealth Management

A division of UK based Touchstone Group, the wealth management business was established in Jersey over 20 years ago, as Landsteinar, a technology company providing software to the utility sector.

The business quickly took advantage of the growth in the Jersey trust industry to develop its wealth management system. Touchstone wealth management now has a global client base and has grown to over 50 staff with offices in Jersey, Australia and Singapore. Touchstone’s NavOne product is developed using the Microsoft Dynamics NAV platform (originally Navision).

NavOne and 5Series have similar functionality so it will be interesting to see how the longer term product roadmaps change. Will they try and segment the market to offer different products to different types of customer? Will one product emerge as the dominant? These and many more questions will hopefully be answered in the coming weeks and months.

Solitaire Consulting has clients using many of Microgen’s products and Touchstone’s NavOne. I enjoy a good relationship with both companies and will be keeping a close eye on developments. Any observations and advice will be featured in future articles.

Paul Every
Director & Principal Consultant