Currently ranked: 26
Previously ranked: PNR
Private equity firm TA Associates invested in e-trading pioneer Datek Online Holdings Corp. in 1999. That was ten years into Kenneth Schiciano’s nearly three decades with TA, which was founded in Boston in 1968 and has since raised $24 billion of capital. Datek was the first in a long and successful run of financial technology investments that would continue into what is now dubbed the fintech era. What makes today’s fintech different and “incredibly dynamic,” says managing director Schiciano, is “the postcrisis changes in banking,” including tighter regulation and cost and balance-sheet reductions. Coupled with the availability of cheap computing power and storage, these changes “create opportunities for new companies,” he says.
A former AT&T Bell Laboratories systems engineer with master’s degrees in electrical engineering and management, Schiciano notes that TA has not altered its focus on “profitable growing businesses” in core sectors: business services, consumer and retail, financial services, health care, and technology, with financial technology as a subsector of the last.
Schiciano’s specialty is capital markets, where he frequently operates in tandem with his North America technology group co-head, Jonathan Meeks, who joined TA in 1997. They worked together on Datek, which in 2002 was acquired by Ameritrade Holding Corp. (now TD Ameritrade). Among other early investments in trading businesses: Island ECN, which merged with Instinet in 2002 and became part of Nasdaq in 2005; Intercontinental Exchange (ICE), which went public in 2005 and later bought NYSE Group; Creditex, a credit derivatives platform that ICE purchased in 2008 for $625 million; Bats Global Markets, which held its IPO in 2016 and was acquired by CBOE Holdings last year for $3.4 billion; and Ireland-based ION Trading, now part of ION Investment Group, a holding company for trading and treasury software providers, which TA exited from in a 2016 recapitalization. Last March, TA acquired ITRS, a provider of system-performance-monitoring software to leading financial services organizations.
Schiciano says that he and colleagues who focus on fintech, including London-based managing partner Ajit Nedungadi and managing director M. Roy Burns in Boston, are tracking trends in insuretech, regtech, distributed ledger technology, and payments. In 2015, TA bought a majority of Procare Software, an example of what Schiciano terms “payments integrated into a specific application” — in this case childcare management software. And in February 2017, TA announced a minority investment in health care payments processor Retriever Medical/Dental Payments.