SEI Acquires Novus Partners in Bid to Target In-House Investment Teams

SEI eventually hopes to use the Novus platform to connect asset allocators and managers.

Illustration by II

Illustration by II

In a bid to grow its business targeting in-house institutional investment teams, SEI has acquired data and analytics provider Novus Partners.

The firm announced the deal on Friday, although terms were not disclosed. According to Paul Klauder, executive vice president and head of SEI’s institutional group, the deal will fill a hole in SEI’s recently launched Enhanced Chief Investment Officer business.

“What we recognized a few months ago is that while we were very strong on the back office and middle office account, [we] had a product gap [in] analytics and technology and user interface,” said Klauder. “The Novus Partners technology solved that.”

Enhanced CIO is a platform that targets asset owners who have an in-house team but need help with back-office or technology operations. “We’re very proud of our OCIO solution, and we’re one of the largest providers, but we know [that] at some asset level — maybe $1 billion, $2 billion — the organization wants to have dedicated resources internally,” said Klauder. “OCIO doesn’t make sense for those types of organizations.”

The deal process began earlier this year when Novus hired Piper Sandler to act as an investment banker and shop the company around. According to Klauder, the financial owners wanted an exit from their investment. SEI began exclusive negotiations with Novus over the summer. “What we really liked was the culture, the richness of the platform, the technology they have, and [their] vision of connecting allocators to managers through a virtual ecosystem,” Klauder said. “That’s a vision that we have as well.”

Founded by Basil Qunibi in 2007, Novus received investments from Bain Capital Ventures and Index Ventures in 2013. At the time, the firm employed about 100 people. Novus is smaller now, with 49 people on staff, all of whom will become SEI employees, according to the announcement.

SEI has been particularly acquisitive in the past month. On October 21, the firm announced that it had purchased Atlas Master Trust, a U.K.-based defined contribution master trust previously owned by Capita. Days later, on October 26, the firm said that it had acquired Finomial, a financial technology firm that offers a cloud-based platform for investors.