Motive Partners raises $ 2.5 billion for Fintech deals

Private equity company Motive partners has raised $ 2.5 billion for its latest flagship fund to invest in financial technology companies, the firm’s managing partner Rob Heyvaert said in an interview with Bloomberg News.

The fund and associated co-investment vehicles raised $ 1.5 billion more than the original target, marking a significant step up in size from the company’s debut fund of $ 485 million in 2019, Heyvaert said.

The latest capital raising in a difficult market for new managers is a confirmation of the company’s specialized approach and focus on a sector that Motive believes will remain largely unaffected by a market correction. Bob Brownsaid a founder at Motive.

After a decade of rapid growth, the private equity industry is facing one of the most challenging fundraising environments in many years due to investors’ caution in increasing exposure to what is perceived as a risky asset class, and also fierce competition from other managers.

Brown said he had completed 180 funds during his career so far. “This was definitely the most eventful,” he added. “It was my first through a pandemic and several market corrections.”

Unlike fund managers who invest across a number of sectors, Motive focuses exclusively on growth and acquisition investments in software, investment and information services across North America and Europe.

The approach is something its executives believe will increase Motive’s prospects as the economic outlook darkens, including for fast-growing financial technology companies such as Klarna Bank AB which have seen their depreciation shrink in recent months.

The motive steered away companies that lost money but grew rapidly. “We never jumped on a $ 10 billion idea and lost $ 400 million,” said Heyvaert. “Valuation has always been very important to us. We are very sensitive to earning capacity. “

“We feel very good about the industry itself and our portfolio,” Brown said. “Financial technology has proven to be resilient through recessions and cycles. When you think about financial technology and the end customer, in an environment of rising rates, banks are more profitable. “

The firm has benefited from selling financial technology companies to large lenders and other large private equity firms seeking to improve their understanding of a niche but lucrative sector.

In March it was sold Global stocksa provider of cloud-based software for managing employee share plans, to JP Morgan Chase & Co.

The sale gave a ten-fold return on the original capital invested for Motive, said people familiar with the deal. Usually, private equity firms try to double investor money when investing it.

Motive helps its portfolio companies to maintain and improve their existing technology. As for Global Shares, the company parachuted into one of its executives to act as the company’s chief information officer.

Last year, Motive sold a minority stake in itself to the American private equity giant Apollo Global Management Inc. As part of the agreement, Motive’s in-house team of technology experts Apollo will help improve their cross-platform technological capabilities in areas including distribution.

Motive was founded in 2016 and has offices in New York, London and Florida, according to the website.

The company counts a number of senior former CFOs among the management team. These include Blythe Mastersformer senior manager of JP Morgan, and former Fiserv Inc. CEO Jeff Yabuki.