Broadridge acquires institutional trading platform Itiviti in consolidation play

US-based tech provider for financial institutions (FIs) Broadridge is acquiring Sweden-based electronic trading platform Itiviti for €2.14 billion ($2.44 billion), per its press release. Broadridge offers a wide range of tech solutions for FIs, including multichannel communications tools, predictive market data analytics, and streamlined daily trading for more than $10 trillion in securities globally. Itiviti is a capital markets technology provider that helps over 2,000 FIs consolidate their trading infrastructure to drive cost savings.

The acquisition will broaden Broadridge’s capital markets technology capabilities and expand its international footprint. Itiviti’s focus on front-office trade order and execution management systems complements Broadridge’s existing capital markets capabilities, such as its post-trade product suite. The combined solutions will therefore further streamline FIs’ front-to-back technology stacks and trading lifecycles. This will enhance Broadridge’s value proposition among FIs, which it can then leverage to cross-sell its other products, like its recently launched Wealth Lending Network marketplace. Finally, Itiviti holds a strong presence in Asia-Pacific and EMEA, enabling Broadridge to reach new growth markets outside of the US.

Wealthechs are consolidating to better serve FIs, as the latter seek more comprehensive services to digitize their operations.

• The pandemic has laid bare FIs’ low levels of digital maturity. Enhancing digital capabilities will be key for wealth managers to avoid client churn in 2021, per a Capgemini report. Last year, investors moved their money between different firms at 3.5 times the rate of the previous three years, in part to seek the best digital services: 89% of financial advisors reported that tech tools became more critical amid stay-at-home orders.
• More wealthtechs will acquire fellow providers to offer fully end-to-end solutions to FIs. Such acquisitions can quickly turn wealthtechs into one-stop shops for FIs, preventing them from having to take on multiple vendors. The Broadridge deal follows tech giant NEC closing its own purchase of fintech software provider Avaloq in December. More acquisitions will likely occur this year to snap up highly valued wealthtechs and better serve FIs, starting with prime acquisition candidate Enfusion, which raised $150 million at a $1.5 billion valuation in January.