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Calculus invests £2m in low-cost platform
by Danielle Levy on Feb 20, 2014 at 15:11
Calculus Capital has ploughed £2 million into Quai, a digital administration services provider for investment firms.
The private equity manager invested in Quai via its EIS fund. Calculus said it was attracted to the firm because it is a low-cost portfolio management system provider, which it believes can benefit from regulatory changes.
Both the retail distribution review and auto-enrolment are pushing providers towards offering high-volume, low-margin saving plans. Calculus said it believed this would create room for new providers to take market share.
Tony Webb, Quai managing director, said: 'There is a huge need for our services and technology platform; investment and pension administration systems are effectively creaking under the increased demands placed on them by the need to roll out mass-market products.
'Unless they take action this strain on their back-office systems is likely to result in potentially costly and damaging problems occurring.'
Quai offers a portfolio management system which allows banks, insurance, pension and investment businesses to administer high volumes of savings plans through automated systems, straight-through processing. They also offer online functionality and model portfolio management services.The company was set up in 2011 and has so far signed up a number of clients. Charges vary from flat fees to percentage-based charges and depend on a variety of factors, size and complexity of the requirements.
Susan McDonald, chair of Calculus Capital, said: 'Providers are having to manage more pension schemes, savings and investment products at a lower unit cost, whilst struggling with inefficient legacy systems and processes.
'Established operators must choose whether to build bespoke in-house systems to administer mass-market products – which is likely to be extremely expensive and time-consuming – or to outsource to a service supplier with a fully developed platform.
'Quai’s platform is regarded as one of the most advanced and cost-effective third-party solutions and is therefore generating a great deal of interest from major financial institutions.'
McDonald added the £2 million should provide Quai with the breakthrough capital it needs to convert interest in its platform into signed contracts.
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