The investment management industry seems to be at an inflection point, with investment strategies becoming increasingly complex and the market demanding greater efficiency and stricter regulatory compliance. It is estimated that global assets under management expanded 40% in the past five years. Enfusion, Inc., a provider of cloud-based investment management solutions, was created with the goal of removing the barriers faced by asset managers.
The Chicago–based company recently revealed plans to offer around 15.3 million shares in an initial public offering at an estimated price between $15 and $17 per share. At the upper end of the price range, the offing is expected to fetch around $260 million. Pursuant to the IPO, the stock will list on the New York Stock Exchange under the ticker symbol ENFN. The company, which was worth $1.5 billion after the last funding round, is expected to reach a valuation of $2 billion after the stock market debut.
The proceeds from the offering will be used mainly for buying equity interests in the company’s operating subsidiary Enfusion Ltd., repaying debt, and for general corporate purposes. The group of underwriters will be led by Morgan Stanley (NYSE: MS) and Goldman Sachs Group Inc. (NYSE: GS). The management is yet to disclose the IPO date.
Enfusion’s software-as-a-solution platform allows investment managers, including hedge funds and family offices, to focus on the primary task of generating returns for their investors. It unifies and simplifies workflows, provides a real-time view of clients’ business, and reduces operational risk through user-defined access controls.
Enfusion looks poised to leverage the growing demand for comprehensive investment lifecycle management solutions designed to unify mission-critical systems and combine data for seamless access, in a rapidly changing market. The steady increase in IT spending by investment management firms, which is expected to accelerate in the coming years, and the largely untapped market give enough room for growth.
In Expansion Mode
The company’s growth strategy is focused on broadening and retaining the client base, taking advantage of its leadership position in cloud-native solutions for hedge funds. To meet the growth targets, the company is investing heavily in innovation and expanding to new geographical regions, besides pursuing acquisition of complementary businesses and technologies.
Since the beginning of the year, the company signed a record 266 new clients, which is seen as a testament to its resilience to the COVID-induced disruption and value of the solutions being offered. In fiscal 2020, Enfusion generated revenues of $79.6 million, which is up 35% from the previous year. At $4.1million, net income was sharply lower than the 2019 level, mainly due to an 85% surge in operating expenses.
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