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BBH Capital Partners Invest $22 Million in Scivantage

Scivantage's Maxit product helps firms comply with new IRS cost-basis reporting requirements.

Financial planners often advise clients to "invest in what you know." Brown Brothers Harriman Capital Partners, the private equity division of Brown Brothers Harriman, followed that advice and invested $22 million in Scivantage, a provider of Web-based, front- and middle-office technology solutions to the financial services industry.

"We are part of the financial services industry so we have a better understanding of a company such as Scivantage because we are both part of financial services," says Charlie Shufeldt, Senior Advisor to BBH Capital Partners.

It also helps to have a great recommendation from a user of the company's product. In this case, Brown Brothers Harriman's Investor Services Business unit had evaluated Scivantage's Maxit product -- an automated cost basis, tax management and portfolio reporting solution -- and found it was the best product on the market. "As a custody bank, we are impacted by the new IRS cost basis reporting requirements," says Chris McChesney, senior vice president, investor services business unit. "As a result, we conducted an exhaustive review of industry solutions. We also explored an internal build, but we ended up going with the Scivantage product. We came to the conclusion that Scivantage is the best fit for us."

"We felt great validation by having Brown Brothers Harriman in its securities servicing capacity saying the technology is the best solution in the marketplace for their our needs," adds Shufeldt. "That also added to our comfort level."

The investment will be used to provide growth capital to Scivantage and liquidity for certain early-stage Scivantage investors. As part of the investment, BBH Capital Partners Jeffrey Meskin and Charles Shufeldt have joined the Scivantage Board of Directors.

Scivantage will use the capital to grow its product lines and to expand into other areas. "With the new capital, we are going to continue to grow the Maxit opportunity, which we feel has some room to grow," says Adnane Charchour, CEO of Scivantage. "In the wealth management space, there are additional ideas that we are going to bring to the marketplace. We are also going to look at international expansion. Without BBH Capital Partners, we would not have looked at these opportunities."

Despite the investment and the two seats on Scivantage's board, BBH Capital Partners is not looking to change the way Scivantage does business. "We are looking for growing middle-market companies with $15-$100 million in sales," Shufeldt says. "We are looking for companies who are serving other businesses. Scivantage fits into the market segment and we were impressed with the management team. We are not a 'buy-out' shop where we change a company's management team. We like to invest in strong management teams and with Scivantage, we saw a management team that simply needed capital to invest to do great things."

"Our investment in Scivantage reflects our confidence in the company's proven ability to execute on its growth strategy and unique value proposition to financial institutions," Jeffrey Meskin, managing director and co-head of BBH Capital Partners stated in a press release. "In addition to a rapidly growing revenue stream, Scivantage possesses many of the characteristics we look for in an investment opportunity, including a strong management team, a capital-efficient business model and a strong competitive position."

"As a bank working with Scivantage for a number of years, we understood their unique business needs and recognized the company's potential for continued growth," William Ruckert, senior vice president of middle marketing lending at The Provident Bank stated in a press release. "Our lending team worked closely with Scivantage executives to come up with the best financial solution to help expand their business. We are pleased to be able to provide a flexible financing program for this unique transaction." Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio

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