The interview below with Ian Manocha, CEO, Gresham Technologies (Gresham) originally featured on FTF News on Friday June 4th, 2021.
(FTF Editor’s Note: Last week, two major reconciliation services competitors — Gresham Technologies plc and Electra Information Systems — announced that they will be combining into one provider via Gresham’s $38.6 million acquisition of Electra.
FTF News got time with Ian Manocha, CEO at Gresham, and this is the first part of a two-part Q&A chat. For this installment, Manocha focuses on overlapping customers, product lines and the market landscape.)
Q: What about the Gresham offerings and the Electra offerings? Are they complementary? Will there be some issues there if they’re not?
They are complementary. And I’ll give you some stats around that.
If you look at the 270 customers [of the combined company to come] … there are only four joint clients. And the nature of what we both do, therefore, is complementary. The [Gresham] Clareti offering as a reconciliation capability has been designed to be cross industry. In other words, it’s very flexible and can take in any form of data, real-time, batch — all of that. And, by virtue of that, we can solve problems for sell-side, buy-side, retail and commercial banking, as well as for energy, insurance, and large corporates.
Electra has built a lot of deep, buy-side specific functionality, such as out of the box supporting, for example, or configurable controls for specific, well understood, buy side problems like NAV.
So, the intent is that we will retain the Electra offering and it will end up sitting on the Clareti underpinnings. But that will all be invisible to the client because what we’ll have is all of that functionality … ultimately the back end will become Clareti. But there’s no rush to do that. Electra’s clients, from everything we can tell, are really happy with what they have.
The other [Electra] piece that is quite interesting is they have a data service which is a really valuable capability in terms of data aggregation for the buy-side community.
We don’t offer that. So, it would be our intent to, obviously, take that global, and take it to our existing clients. And, in fact, some of Gresham's clients already use Electra’s data service. So you’ve got Gresham’s reconciliation platform and Electra’s data service already implemented in some buy-side clients.
Q: Initially, how will Gresham be handling Electra’s customers?
In the interim, Electra has communicated a joint statement that we’ve signed up to around our commitment to all Electra customers to continue to support their products and services as we do today.
We’ve been reaching out via the Electra team to Electra customers over recent days, and it’s actually gone really, really well. The feedback’s been really positive.
Over time, of course, we will cross train Gresham’s resources. So, for example, Electra’s clients in Europe will be able to get support from the local Gresham technical teams, as well as reaching back to the U.S. So, that kind of opportunity to globalize is quite important. But the Electra team will continue to own and manage those relationships.
Then, obviously, off the back of this, we’ll be expanding our sales teams to go global, and I hope to continue the successful journey that Electra has been on, and that we’ve been on.
Q: What do you think will happen to the competitive landscape for the reconciliation and the post-trade services providers?
Well, on the buy side, this immediately puts us in the market leadership position in terms of the number of clients.
Electra, prior to the acquisition, counted something like, I think, 70 of the top 200 asset managers by AUM. And then, obviously, we’ll add to that Gresham’s installed base of something like 25 or 30. So that puts us in a really good position as preeminent provider of reconciliation plus data services to the buy side. I think that’s going to shake things up because what it means is we’ve got a global buy-side business, and we’ve got good penetration in terms of accounts. And we’ve got the ability to devote a lot more research and development firepower to take the products forward. So, we’ll be bringing those R&D teams together, and that’s going to accelerate some of the Electra’s current plans around artificial intelligence and the cloud.
I think if you look at the competition that’s out there … they’ve got generic products. We firmly believe that the future is more and more industry-specific content. So, I think it’s going to accelerate the innovation agenda. We’ve got a lot more scale, a lot more global reach. And we start from a point of 20-odd years of deep domain expertise that is in the product, not just in the heads of people that implement it, but actually in the product. So, yeah, I think it’s already shaking things up, actually, in terms of what I hear in the market. And that’s a good thing.
I think it’s going to be really good for Electra customers, because they’ve got the backing of a significant player behind them. They’ve got the commitment to their current products, and they’ve got a commitment to an innovation agenda. And they have confidence in terms of where we fit market share wise; I think we move into the number one slot on the buy side.
Globally, i.e. cross-industry, then, we move firmly into the number three slot. And with all the work that we’re doing with Clareti and winning the tier-one banks — which you may or may not have seen — I think what we’ve got now is the makings of a next generation leader when it comes to data control, data quality, and reconciliations, whether it be on premise or in the cloud.
For further information on Gresham's announcement of its intention to acquire Electra Information Systems, please click here to read our press release