Waystone

Private Equity Manager (GP)

Case study

About the company

Waystone is a provider of outsourced governance, risk and compliance services to the asset management industry. The company services a number of blue-chip asset managers with combined assets under management of US$2tn. Waystone has grown to now employ c.350 individuals in globally recognised epicentres for fund management including London, Hong Kong, Singapore, Ireland and Luxembourg.

Investment rationale

• Founded in 2000, the company has grown organically and through a mergers and acquisition strategy, with nine add-on acquisitions completed between 2019 and 2021.
• The company provides services that are mission-critical to a fund’s set-up and ongoing operation. This results in a sticky business model evidenced by historically low customer churn rates and limited customer switching.
• Regulatory scrutiny and increasing complexity are providing a strong tailwind for the industry, in which Waystone is a leading player.
• Montagu Private Equity (“Montagu”) has extensive experience in fund services, including a successful investment in peer company, Universal Investment.
• Since Montagu’s investment in 2021, the company has grown organically and through targeted add-on acquisitions which have expanded Waystone’s service offering and geographical footprint.

Our relationship

Pantheon has a long-standing relationship with Montagu. PIP is a primary investor and has also co-invested alongside the manager, while Pantheon holds an advisory board seat with Montagu. Early engagement with Montagu allowed Pantheon to secure a sizeable allocation in this opportunity.

Active management and value creation

As a joint owner of Waystone, Montagu will have the opportunity to implement organisational best practices and further support Waystone’s buy-and-build strategy.

In April 2023, shortly following PIP’s co-investment in the company, Waystone signed agreements to acquire Link Fund Solutions, a European fund services provider with £160bn of assets under oversight and administration, closing subject to regulatory approval and other conditions. Combined with the acquisitions of KB Associates, Centaur Fund Administration and T. Bailey Fund Services in the past year, a comprehensive product offering and exposure to structurally growing markets, Waystone is well placed to continue its current growth trajectory.