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.
'The funding will support Quai in the completion of several deals with key UK financial institutions that are keen to benefit from the company’s services as soon as possible. It also provides extra resources so the company can continue to develop and enhance its systems and focus more efforts on business development.'