SS&C Technologies specializes in software solutions that enable its customers in the financial services industry to automate complex business processes, fulfill their information processing needs and comply with an ever-growing book of regulations.
The company offers a wide range of software products and related services that address front-office functions such as trading and modeling, middle-office needs such as portfolio management and reporting, and back-office operations such as accounting and performance measurement.
At the end of 2014, the company’s more than 7,000 clients included banks, hedge funds, private-equity outfits, insurance companies and real estate investment trusts (REIT). In aggregate, these customers manage more than $26 million in assets.
About 90 percent of SS&C Technologies’ revenue comes from contracts that usually renew like clockwork—a testament to the quality and mission-critical nature of the company’s software solutions. In fact, the biggest renewal risk occurs when a customer goes under or is acquired by a larger firm.
Although the company has some exposure to contractions in the economy and the stock market, the embedded nature of its solutions and its diversified customer base limited its revenue decline to 3.7 percent between 2008 and 2009.
Several factors should enable SS&C Technologies to meet management’s long-term target for organic revenue growth of 5 percent to 10 percent annually.
For one, the financial services industry increasingly relies on third-party software and service providers for these critical systems instead of investing the capital necessary to build, maintain and update these systems internally.
SS&C Technologies should also benefit from growing demand for risk assessment and reporting tools to comply with new regulations and to meet investors’ expectations for transparency and mobile access to their accounts.