As exciting and transformative as the current wave of financial technology innovation may be, a false sense of bravado one to two years ago clouded many strategists and investors vision of the long-term big picture, according to Jonathan Korngold. Long-term and big picture are defining characteristics of global growth equity firm General Atlantic, which was formed in 1980 and which Korngold, its New Yorkbased head of financial services, joined in 2001 after working in principal investments and M&A at Goldman Sachs Group. In the past year the team that Korngold has been leading since 2012 made more than $1 billion in new and add-on financial services and fintech investments; the sector is General Atlantics biggest, accounting for nearly a third of the total portfolio. Irrespective of the hype cycle, the fintech momentum is accelerating: Korngold points to such highlights as a majority stake in commodity news and data provider Argus Media, announced in May and valuing that company at nearly £1 billion ($1.2 billion); and the sale of portfolio company OptionsHouse, announced in July, for $725 million to E*TRADE Financial Corp. The 42-year-old Harvard MBA, who previously oversaw the firms health care sector for seven and a half years, says the advantage is going to those able to differentiate long-term winners from me-too or narrow niche companies between long-term solutions and point solutions or widgets. General Atlantic identifies what Korngold terms secular trends in such areas as cross-border payments and insure tech; looks out over a ten- to 15-year horizon, so it is not locked into typical five- to seven-year venture capital or private equity holding periods; and has a group of about 20 people with deep financial services expertise across a global footprint of 12 offices, among which insights and perspectives are cross-pollinated. Weve been on the ground in Mumbai for 15 years, Korngold notes as context for the firms 2015 investment in IIFL Wealth Management, which then had $12 billion in client assets. Eyeing what he calls huge opportunities to upgrade decades-old solutions in the insurance industry, General Atlantic in June joined Genstar Capital and TA Associates in investing in Hartford, Connecticutbased software company Insurity.
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