FinClear back on the acquisition trail; nabs cash investment platform

afr.com:

Magellan-backed equities clearing firm FinClear has kicked off a spending spree with the acquisition of Transact1, a Brisbane cash investment platform used by industry super funds with $3.1 billion in funds under management.

Transact1 is a place for institutional and wholesale investors to house their considerable cash, aggregating a range of cash investment products, providing price discovery, portfolio optimisations, administration and compliance. Sources told Street Talk that the prize for FinClear is Transact1’s technology, intellectual property and banking relationships. The platform hosts most Australian deposit-taking financial institutions, including the major banks, and leading international banks.

Finclear CEO and founder David Ferrall is hunting opportunities. Peter Braig

A FinClear spokesman declined to provide a valuation for the acquisition. He added that cash management capabilities had become a “core requirement” for FinClear’s clients given “current economic conditions”.

FinClear and its software arranges settlement for around half the public equity market, including the largest retailer broker, CommSec. It has around 550,000 end clients and works for about 300 intermediaries, processing billions of dollars in equity trades each year for stockbrokers.

Since 2015, the company has made two key acquisitions – Dion Australia in 2018 and third-party clearing house Pershing Securities Australia from BNY Mellon in 2021. It also picked up Lonsec’s stockbroking business in 2016.

Sources said the Transact1 acquisition positioned FinClear to move into additional service areas now that it had achieved critical scale, beyond its core business of third-party execution, clearing and settlement services. It is