Genstar Capital, a premier non-public fairness participant within the wealth administration area, is making a majority funding in Docupace, which supplies back-office software program and help to advisory corporations.
Genstar’s recapitalization of the agency follows FTV Capital’s majority funding in 2020. FTV will stay a minority investor.
Since FTV took possession, Docupace has grown considerably, with greater than 130 enterprise prospects and processing greater than 130,000 digital paperwork each day, in line with CEO David Knoch, who grew to become CEO after FTV took over.
In an interview with WealthManagement.com, Knoch mentioned the trade had not but broadly devised “a greater reply for automating the again workplace” than Docupace’s improvements.
“I believe we constructed a robust again workplace ecosystem and captured the eye of {the marketplace} broadly, together with non-public fairness corporations like Genstar,” Knoch mentioned, noting that the Docupace crew had identified the workforce at Genstar for a while.
In response to Knoch, Genstar’s funding will assist the agency “speed up” its present product improvement roadmap, which features a full overhaul of the Docupace consumer expertise and enhancements to the combination structure for purchasers.
Moreover, Knoch expects extra M&A alternatives for the agency after closing on the funding by the top of the third quarter of this yr.
Docupace acquired two corporations in 2021: PreciseFP, a digital account aggregation and onboarding supplier and jaccomo, which supplies compliance, knowledge integration, monetary reporting and advisor compensation methods. However since then, Docupace has gone quiet on acquisitions.
“There’s plenty of causes for that, not the least of which is the general acquisition market within the U.S.,” Knoch mentioned. “However we now have a possibility at present in partnership with Genstar to deliver different nice applied sciences into Docupace, into this back-office ecosystem, to enrich our personal product improvement efforts.”
Knoch wouldn’t specify acquisition targets however mentioned Docupace’s purpose was to create a back-office ecosystem for the trade, and any such capabilities the corporate doesn’t at present provide can be potential targets. There’s additionally no single companion or supplier spanning the whole thing of the trade, with most options focused at large- and mid-sized corporations, Knoch mentioned.
“I believe each agency of each dimension is as entitled to an incredible operational expertise as some other agency, significantly the big corporations, so we should always not find yourself with a distinction between the most important and smallest because it exists at present,” he mentioned. “We might use the power to do M&A or acquisition to make an answer like Docupace extra ubiquitous throughout the trade and provides each agency of each dimension a possibility to have an incredible back-office ecosystem.”
Genstar Capital, based in 1998 in San Francisco, manages over $49 billion in belongings throughout over 40 portfolio corporations. It targets investments within the monetary companies, industrial, software program and healthcare industries.
Genstar’s first wealth administration funding was in 2015, when it took a controlling curiosity in Mercer Advisors. The agency acquired majority management of Cetera in 2018 and Cerity in 2022. Genstar Director Sid Ramakrishnan mentioned the agency had adopted Docupace’s transformation for a number of years and was prepared to assist it “on the subsequent chapter of development.”
“The wealth administration ecosystem is very and ever-increasingly complicated, and corporations want scalable operations that serve monetary advisors and their purchasers,” he mentioned.
FT Companions and RBC Capital Markets served because the monetary advisors for Docupace and Genstar, respectively. Gibson Dunn was Docupace’s authorized counsel, and Ropes and Grey served as Genstar’s authorized counsel. The phrases of the deal weren’t disclosed.
