London-based private equity firm Hg said it is buying a controlling interest in Riskalyze Inc., the Auburn-based company that serves investment advisers with risk and compliance technology.
Hg’s investment will buy out early investors into the company as well as the position of San Francisco-based FTV Capital, which invested $20 million into Riskalyze in October 2016. Technology investment site Crunchbase lists total funding into Riskalyze at $23.5 million.
On his Facebook page, Riskalyze founder and CEO Aaron Klein said the investment by Hg "is a huge step forward" to recapitalize the company.
"What does 'recapitalized' mean? Well, we're still an independent company. Same leadership team, same company, same product. Today, we're owned by a mix of founders, angel investors and FTV Capital. After this transaction, it'll be the same founders and Hg who own Riskalyze," he wrote.
He went on to say that he personally reinvested the majority of his holdings into the company.
The amount of Hg's investment is not being disclosed. The investment will allow the company to continue to grow and add new clients, Hg said.
In the last year, Riskalyze has added thousands of advisers to the platform, and it has signed key enterprise clients such as Cetera, Atria Wealth, Grove Point, Hightower, Boston Private and Private Advisor Group.
“I am deeply committed to the success of this next chapter and am honored to continue leading the firm as CEO,” Klein said.
Riskalyze has 175 employees in offices in Auburn and Atlanta. The majority work in the Auburn office, said spokeswoman Allie Zendrian. Riskalyze is private and does not share revenue numbers, she said.
Hg is a major investor into software and services companies. It has invested into a total of 35 companies, including 10 financial technology companies, according to its website. It has more than $37 billion in funds under management, and it has offices in London, New York and Munich.
Riskalyze has developed a series of products for the financial services industry, including wealth advisers, retirement investment advisers and stockbrokers. The 2011 startup launched with a proprietary risk assessment product that measures individual investors' risk tolerance, and has gone on to develop other analytics tools and a compliance product for financial advisers.
Riskalyze said its platform supports tens of thousands of financial advisers who use it to manage millions of client accounts with over $400 billion in assets.
“Riskalyze has seen significant momentum in the last few years. The team have successfully established themselves as providing a best-in-class SaaS tool that solves real business challenges in a sector still seeing increasing tech adoption,” said Max Dewez, director at Hg in New York, in a news release. "Riskalyze’s software enables advisers to participate in key trends in wealth management and offer more holistic engagement with their clients."
The transaction is subject to regulatory approvals and is expected to close before the end of September. Hg’s Dewez, Sebastien Briens and Richard Earnshaw will join the board of directors of Riskalyze after the deal closes.
