Cheryl Nash: Fiserv-PE joint venture eyes deals in wealth management

December 6, 2019 4:25 PM

Fiserv's agreement to sell the majority stake in its investment services business to private-equity firm Motive Partners will be the first of many deals for the newly formed joint venture, says Cheryl Nash, president of investment services at Fiserv.

Fiserv's continued support, blended with the business-building ambitions of Motive, will position the still-unnamed venture into a buyer's market in wealth management, Nash says.

“There's just so much opportunity for growth in wealth management,” says Nash, who will lead the new joint venture.

“We might need some acquisitions to tie up some loose ends,” Nash acknowledges. “When we look at the acquisitions out there, obviously there's opportunities for us to make a big, big difference.”

Fiserv’s wealth management business provides technology to seven of the top 10 U.S. broker-dealers and nine of the top 12 U.S. retail asset managers, according to the firm.

Motive is owner of financial data firm Dun & Bradstreet, in addition to being an investor in several European fintechs.

Read what else Nash has to say about how the deal came together and what it means for the future of the venture.

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The million-dollar question: what happened and how did it come about?

We got several inbound inquiries about our business, so when that started happening, it was a good time for us to reflect on the business — especially with the FiServ strategy that really focused on payments and banking. It’s a great strategy for overall for FiServ. We determined that this is a great time for us to see if there was an opportunity for us to find a new owner.

We're getting the best of both worlds because we’re retaining 40%. It’s a great M&A market. There is a lot of PE money out there. It was a good time for us to really start down this next journey.

Were there contributing factors in terms of a cultural fit or business model which made it make more sense to just part ways?

From a cultural perspective, we've had a good cultural fit with FiServ. It was more about strategy. It was very much focused on the strategic and direction of where FiServ was going and where we needed to go as a wealth management provider.

Fiserv is primarily a core banking provider. Was that any sort of an issue in terms of strategy?

You have FiServ, which is very focused — as they should be — on payments and core banking. It was the right time for us to move out of FiServ and find a new owner who's going to invest in wealth management.

There's definitely something in the air right now in wealth management when it comes to acquisitions. Why did the deal make sense now?

There's so much opportunity for fintechs to really help make a difference. There’s work that's happening today about creating more efficient platforms and helping investors meet their goals. There's a lot more [acquisitions] needed [today] to support larger firms. What we do today is really … we enable that through our scale. So that's exciting for us when we see all those ... some of those opportunities that are out there.

In terms of future acquisitions, is there a wish list or a priority?

When I think about where we are today and I think about our current solutions, two things come to mind. We really want to continue to expand on our current platform, which means that we will invest more aggressively in things like user interface and user experience and API libraries. So when I think about some areas that we can invest in our current platform to really drive digitalization, it's around those core capacities.

What do we go acquire? That's an area that we have not locked down yet. It's an area that we are very focused on, and trying to understand what our first, second and third acquisitions are going to be for us.

What are some areas of interest for the firm?

We look at our platform from the front, middle and back office, and we look at where we're strong and where there might be opportunities or where our clients have asked us to invest the most. There are a few areas that they want to continue to build around and a big one is financial wellness.

So yeah, we will continue to look at that to continue to drive innovation through. It’s not just about building it ourselves like we have in the past. This time it’s through acquisitions.