Most people wouldn’t think twice before typing in a string of emojis or an inside joke as the description for a Venmo mobile payment to split a pizza for dinner. But it would make Mark Evans pause.
Mr. Evans, CEO and chairman of Pittsburgh-based investment data management company Confluence Technologies, would be thinking ahead to future implications. That vague description, he said, would make it hard to fully analyze someone’s expenses later.
Mr. Evans is part of a financial industry that works on such problems on a larger scale with investments like mutual funds and hedge funds. When investors purchase stock or finalize a trade, the specific details don’t need to be perfect for the transaction to go through. But, when financial companies come in later to offer a snapshot of their portfolio or compile reports about their biggest investments, those small errors make it hard to get a full picture.
This is an industry that traditionally filed papers on 1,000 shares of Apple purchased here or 5,000 of Walmart sold there. Those papers aren’t going away.
In fact, Confluence argues, in the past 20 years, regulators have begun asking for more and more paperwork to verify the accuracy and risk of trades and investments. To ease the burden, the company argues investors and financial advisers should think data first and paperwork second.
The company works by analyzing, verifying and repackaging the same sets of trade data for multiple purposes, meaning its clients don’t have to spend as much time filling out — and double-checking — paperwork.
“We’re in the back office doing a lot of reporting and knowledge creation from all the data that comes in from all different places, and turning it into something meaningful,” Mr. Evans said.
Confluence announced Tuesday it had acquired StatPro Group plc, a cloud-based portfolio analytics company based in Wimbledon, a community in London.
StatPro, which has 450 clients in 37 countries, offers services to analyze financial portfolio performance and risk, as well as data management solutions for asset management companies.
Joining Confluence will offer “asset managers and fund administrators an even greater range of support services and analytics,” StatPro founder Justin Wheatley said in a press release announcing the acquisition.
Prior to acquiring StatPro, Confluence was dependent on other data providers to create the information that its employees would then analyze. Since StatPro technology creates those numbers itself, the data will now move through the same system and workflow the entire time, reducing the risk of error, Mr. Evans said.
Confluence acquired StatPro for about $207 million, according to the press release. It could not disclose any additional financial information about the company.
Confluence, which has about 120 employees in its North Shore headquarters, also has offices in Ho Chi Minh City, Vietnam and London, England.
Since its inception in 1991, the company has grown from a handful of clients to working with globally recognized asset managers and fund administrators. It grew from a staff of six at its first anniversary to more than 500 employees with the most recent inclusion of StatPro.
When Mr. Evans founded the company, he didn’t expect the industry to look the way it does now, but he did expect investors to have more questions, more perspectives, more options and more information.
His goal is to help clients trust the computer-processed data and only worry about the things flagged as wrong.
“We come from an industry that in the past, the quality control was having someone else look at the same numbers you just did. That is expensive, slow and probably demonstrably not really going to get you perfection,” he said. “How about this: trust that the system will only show you stuff that is questionable and assume everything else is right?
“We spend a lot of time proving it, but the fact of the matter is that it is provable.”
Lauren Rosenblatt: lrosenblatt@post-gazette.com, 412-263-1565
First Published: October 30, 2019, 12:00 p.m.
