• Clearwater Analytics is acquiring portfolio management and risk systems provider Enfusion for $1.5 billion.
• The acquisition expands Clearwater’s market reach, leveraging Enfusion’s expertise in hedge funds, its strong international presence, and a $1.9 billion increase in its total addressable market, while also aiming to save $20 million through operational efficiencies.
• Enfusion will benefit from Clearwater’s infrastructure and AI expertise.

Investment management solutions company Clearwater Analytics is acquiring Enfusion, a portfolio management and risk systems provider. The deal, advised by J.P. Morgan Securities, is expected to close for $1.5 billion.

“Today’s announcement is about creating a future where our clients benefit from the synergy of two highly complementary, innovative software leaders, paving the way for a unified, cloud-native, front-to-back platform that’s primed to serve institutional investors like never before,” said Clearwater Analytics CEO Sandeep Sahai.

Illinois-based Enfusion was founded in 1998 to help investment managers generate higher returns for their investors. The company’s cloud-based software, analytics, and middle/back-office managed services help institutional investment managers, hedge funds, and family offices build cultures of real-time, data-driven intelligence mixed with collaboration to make faster, more informed decisions while scaling their operations effectively.

“This transaction marks an exciting new chapter for all of Enfusion’s key stakeholders. Since our inception, we have proven that the versatility, scale, and depth of our solutions captures the hearts and minds of both traditional and alternative investment managers,” said Enfusion CEO Oleg Movchan. Together with Clearwater, our shared passion for building innovative technologies and enriching every aspect of the client journey will now accelerate and enhance our combined ability to support our clients’ evolving needs — whether they are expanding into new strategies, asset classes, or geographies.”

Clearwater Analytics automates the entire investment lifecycle with portfolio planning, performance reporting, data aggregation, reconciliation, accounting, compliance, risk, and order management. The Idaho-based company’s clients use its single instance, multi-tenant investment reporting software to aggregate, reconcile, and report on more than $7.3 trillion in assets across thousands of accounts every day.

Clearwater is acquiring Enfusion to advance its goal of creating a comprehensive, cloud-native platform that serves the entire investment management lifecycle. By integrating Enfusion’s front-office capabilities with its own middle and back-office solutions and client reporting tools, Clearwater aims to deliver a seamless end-to-end solution. The acquisition also expands Clearwater’s reach, leveraging Enfusion’s strong international presence as well as its expertise in the hedge fund market, which alone is expected to increase the total addressable market by $1.9 billion.

Enfusion stands to benefit significantly from the partnership, as well. Clearwater’s advanced execution infrastructure and expertise in generative AI are expected to enhance Enfusion’s operational efficiency and improve unit economics. Furthermore, Clearwater anticipates achieving $20 million in cost savings over the next two years, largely through streamlining general and administrative expenses.

“We expect to accelerate growth based on our increased right-to-win, higher back-to-base sales, greater presence across key geographies, and increased total addressable market. Coupled with our operating rigor and use of Generative AI, we have high confidence that we can drive meaningfully improved unit economics at Enfusion while also growing its emerging managed services business. Most importantly, this acquisition enables seamless data management from the front office to the back office, unlocking powerful network effects that amplify client value,” added Sahai.

Clearwater’s purchase price for Enfusion is $11.25 per share, which will be delivered in an equal mix of cash and stock. Clearwater has also agreed to pay $30 million to terminate Enfusion’s tax receivable agreement.

Photo by Mikhail Nilov

• Blockchain data platform Chainalysis has acquired web3 security solutions provider Hexagate.
• Terms of the deal were not disclosed.
• The acquisition aligns with Chainalysis’ mission to build trust in blockchain ecosystems by integrating Hexagate’s machine learning-based threat detection and prevention technology, benefiting chains, protocols, and exchanges.

Blockchain data platform Chainalysis has acquired web3 security solutions provider Hexagate this week. Financial terms of the deal were not disclosed.

Hexagate’s security solutions detect and mitigate real-time threats, including cyber exploits, hacks, and governance and financial risks to help chains, protocols, asset managers, and exchanges keep their funds secure. The Israel-based company monitors blockchain networks and leverages machine learning to identify suspicious patterns and transactions in real-time. Hexagate’s customers include Coinbase and Consensys.

“I have long believed that in order to advance the Chainalysis mission to build trust in blockchains, we would need to expand our business beyond investigations and into prevention,” said Chainalysis Co-founder and CEO Jonathan Levin.

With billions of dollars in crypto stolen each year, Chainalysis anticipates that Hexagate will help create a safer financial platform that fosters trust in solutions. Levin added that protecting the crypto ecosystem will only become more crucial as smart contracts facilitate more value and the use of stablecoins grow. He also noted that governments are increasing the monitoring of smart contracts associated with illicit funds.

Chainalysis was founded in 2014 and has raised $537 million. Among its offerings are automated cryptocurrency transaction monitoring software, investigation software for tracing the flow of funds across blockchains, and profiles of cryptocurrency businesses. Today’s deal marks the company’s third acquisition, following its purchase of Transpose in 2023.

Photo by Bich Tran