Waystone is the leading provider of institutional governance, risk and compliance services to the asset management industry.
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.
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.
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.
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.
For investors in MML Fund VI, MML Ireland I & MML Ireland II
For investors in MML Fund VII