“We wanted a partner with genuine international credentials to help support Waystone’s aspiration to become the global leader in fund governance, risk and compliance services. We built a strong relationship with Rich, Rob and Amar prior to the transaction, and it quickly became clear they were the right partners for us. More importantly, the level of support we received during the investment was everything that was promised and more.”

Derek Delaney, CEO, Waystone

Waystone

waystone.com
Partial realisation to founder shareholders and growth capital to support international organic and acquisitive growth.

The business

Waystone is the leading provider of institutional governance, risk and compliance services to the asset management industry.

The deal

Post the 2007/08 financial crash, the demands on asset managers for more sophisticated governance, risk management and compliance grew exponentially to meet increasingly complex regulation. Originally established as a governance provider to US hedge funds, Waystone saw the opportunity to build a global leader in broader fund compliance services. Having expanded into the Irish AIFM market in 2015, Waystone required a partner to accelerate its European expansion plans.

In 2019, MML invested alongside one of the founders and the incumbent management team for a 50% stake. This investment provided a full exit for a passive co-founder, an element of de-risking for the other, and put sweet equity into the hands of the management team driving growth. Over the course of 2019 – 2021, MML helped the business effect two transformational mergers and seven smaller strategic acquisitions across Luxembourg, Ireland, the UK, Switzerland, the Middle East and Asia. This M&A activity, alongside organic growth of 40%, new product launches, investment in proprietary technology and robust integration helped the business become the standout institutional global player in fund services.

The exit

MML supported the transformation of Waystone to successfully disrupt the nascent European ManCo market and expand into the Middle East and Asia to become the standout global provider of scale. Having identified the significant market opportunity, we backed an extremely talented and hungry management team to achieve their ambitions in a fast-growing market. Over the course of our investment, Waystone tripled its headcount to 500 people, quadrupled its revenue and grew EBITDA six-fold whilst making significant investment into market-leading proprietary technology and an operational centre of excellence in Cashel, Ireland. In 2021 MML exited its investment via a secondary buyout led by Montagu Private Equity delivering an 11x / 164% IRR return. Waystone is one of MML’s largest and most successful investments and returned 100% of MML Partnership Capital Fund VI in a single deal.

Fund
Partnership
Region
Europe
Deal Status
Realised
Sector
Financial Services

Catch up with CEO, Derek Delaney, 18 months post investment.

How did you choose MML to be your partner?

When Waystone decided to look for a partner, our situation was quite complex. We had two founder shareholders, one of whom wanted to exit and one of whom wanted to partially de-risk, and a business that required an investor to look through the "noise" to see the implicit value in what we were doing. It took us over a year to find the right partner, but we ultimately chose MML as they were able to craft a bespoke structure which resolved all these complexities and their international “boots on the ground” gave us the right platform to take advantage of the market opportunity.

What is the story so far?

It is hard to believe MML only invested in August 2019. Since then, it feels like we have done it all, including completing and integrating nine transactions and a divestment, built a centre of excellence in Ireland, enhanced the senior leadership in the business and continued to grow organically at over 30% per year. Growing at this pace has been tough, but the MML team have been fantastic support in terms of “getting it done” and giving us the structure and challenge to help us execute our ambitious plans.

Related news

Waystone exit completes delivering 11x return
MML completes the exit of one of its largest and most successful ever investments, Waystone, a global leader in fund governance and compliance services.
MML exits Waystone in landmark transaction
MML Capital Partners (“MML”) has signed an agreement to exit its investment in Waystone to Montagu Private Equity.
Waystone completes its ninth transaction and expands into the US, Singapore and the Middle East
We are delighted our portfolio company, Waystone, has announced the creation of a new compliance offering via the merger of four companies to create Waystone Compliance Solutions.
Waystone emerges from merger of DMS, MontLake and MDO
DMS, MontLake and MDO have come together along with previous acquisitions to form Waystone, a business uniquely designed to address the increasingly complex needs of today's governance industry.
MML supports DMS to complete its fifth transaction under MML’s investment
DMS Governance (“DMS”) is delighted to announce the acquisition of Azienda Financial Services (“Azienda”), a well-established and independent corporate services provider, based in Luxembourg. Azienda specialises in administering investment structures for private equity, real estate and structured finance investments.

Associated deal team

Richard Mayers

Partner
Europe

Robert Devonshire

Partner
Europe

Amar Shanghavi

Investment Director
Europe

Bal Johal

co-CEO
Europe

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