Microgen-Touchstone Merger Rebrands As TrustQuay As Industry Consolidates - The Industry Spread

Ricardo Esteves

Ricardo Esteves has seen business and economics through many lenses. He joined the Financial Services Industry in 2009, and has been a financial journalist since 2011. He holds a degree in Business Administration and has experience producing real-time news, from both buy-side and sell-side, as well as for retail traders, brokers and service providers. Esteves' work has appeared in a variety of online publications including FX Street and FinanceFeeds.

Microgen-Touchstone Merger Rebrands As TrustQuay As Industry Consolidates

June 3, 2020

Microgen and Touchstone have rebranded their recent merger to become TrustQuay, the new name and new brand for the combined business. Executive Chairman Keith Hale predicts the trust and corporate services industry could consolidate from thousands of players to hundreds in the next 5 years.

The merger, first announced in November 2019, has made TrustQuay the leading provider of technology to the trust and corporate services market, serving more than 450 clients and 15,000 users in over 30 jurisdictions. The firm has 9 offices worldwide and an established physical presence in key markets including Australia, Guernsey, Jersey, Luxembourg, Singapore, and the United Kingdom.

The merger between Microgen and Touchstone was backed by Silverfleet Capital, the leading Pan-European private equity firm, for £51 million. Silverfleet acquired Microgen in May 2019 as the second investment from its lower mid-market focused European Development Fund, with the ambition of building a market-leading platform in the Trust and Corporate Services market through accelerated organic growth and M&A. In June 2019, Microgen was demerged from Aptitude Software PLC. Silverfleet Capital, a leading pan-European private equity firm, invested in the firm around that time and continues to support the business during this merger.

Since late 2019, the combined business also signed two major agreements and started executing on global rollouts with major industry consolidators IQ-EQ and Ocorian, as well as another six deals with specialist providers including DTOS, Schindlers, and Isles of Knight.

Keith Hale, Executive Chairman of TrustQuay, commented: “I see a once in a generation change in the corporate services, trust, and alternative fund administration market, with the industry players either growing by consolidation or specializing in niche areas. Both drivers will act as a catalyst for a period of rapid digitalization and the need for automation across the industry. We expect to see the biggest upheaval the sector has seen in the past 25 years and our prediction is that in the next 5 years the industry will shrink from thousands of players to hundreds, coalescing around a group of global players, surrounded by smaller specialist firms.

“In tandem, the corporate services, trust and alternative fund administration market has started to shift from a relatively sedentary industry from a technology perspective to one that is now being pushed to change by their clients and regulators alike, as well as rapidly changing business models”, Hale continued. “In the near future, the current highly fragmented industry will enter a new phase of consolidation, combined with the drive for accelerated digitalization.
Firms are coming under increasing pressure to rapidly modernize and digitalize their business models in order to survive and thrive in this fast-changing environment.”

“My experience in conversations with clients is that firms are well aware of the challenges facing them, but need much more assistance in executing their plans for digital transformation in order to overhaul their entire business models, satisfy their clients’ digital expectations and deal with the ever-rising tide of regulation. I believe TrustQuay is uniquely placed with a strong product range, modern technology stack, global coverage and targeted R&D spend in the corporate services, trust, and alternative fund administration market. We have the necessary scale and structure to deliver the rapidly changing needs of the industry, either for large global service providers or smaller specialist firms, to drive innovation across all levels of the industry”, the Executive Chairman concluded.

Demand for global coverage, increased regulatory oversight, changing fee models and cost pressure have driven both significant growth and consolidation within the Trust and Corporate Services industry. This merger aims to accelerate the innovation needed to deliver products that give customers the ability to adapt to rapidly changing market dynamics with best in class technology that the rapidly changing Trust and Corporate Services market will demand.

In April 2020, the combined business appointed David Thorpe as a non-executive director of the combined group. Keith Hale joined as Executive Chairman to run the combined group. Hale is the former CEO of Multifonds, a leading software provider in the fund administration sector.

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