Riskalyze lands private equity funding from HG Capital

The firm’s leadership team, employee base and brand will all remain unchanged, according to CEO Aaron Klein. The deal is a part of a larger strategy to increase growth and innovation at the firm.

Risk analysis fintech Riskalyze Inc. said Wednesday it has entered a definitive agreement for private equity firm Hg Capital to acquire a majority interest in the firm. 

Riskalyze co-founder and CEO Aaron Klein has reinvested the majority of his holdings into the recapitalized firm, and continues to lead the company as CEO and a member of the Board of Directors, Klein said in an interview. The transaction is slated to close by the end of September. 

Terms of the deal were not disclosed.

Klein said the firm’s leadership team, employee base and brand will all remain unchanged. The acquisition is a part of a larger strategy to increase growth and innovation at the firm, which includes allocating the new capital to increase employee headcount and product offerings. 

“The pandemic has created a risk-centric mindset for investors and served as a massive inflection point for financial advisers,” Klein said. “Advisers recognize not having a risk solution on your desk in the 2020s is like not having a computer on your desk in the 2000s.” 

For Hg Capital, a software and services investor in the global fintech sector, the acquisition gives the Munich, Germany-based private equity firm a footprint into the U.S. wealth management space. HG Capital has invested in over 10 fintechs in just over five years with investments topping $1 billion in the sector to date. 

The transaction is an important stepping stone for the company, which was founded by Klein and chief investment officer Mike McDaniel in 2011. With the extra capital, Riskalyze plans to invest in its strategy to provide risk, portfolio analytics, proposal, trading and compliance solutions to advisers and wealth management enterprises. 

Clients include Cetera, Atria Wealth, Grove Point, Hightower, Boston Private and Private Advisor Group, according to the announcement.  

Riskalyze currently dominates the risk tolerance marketplace with a 25.8% market share, according to an adviser software survey. By comparison, FinaMetrica has 4.2% and HiddenLevers has just 1.6% of the market. The platform works with tens of thousands of financial advisers who manage more than $400 billion in assets, according to the release.

For reprint and licensing requests for this article, click here

MOST READ

Recent Articles by Author

Geeta Aiyer is an ESG pioneer and a DEI champion

Geeta Aiyer is an ESG pioneer and a DEI champion

Geeta Aiyer has dedicated her career and personal passion to using finance to support social good via ESG and impact investing.

3 keys to capturing Gen XYZ clients

3 keys to capturing Gen XYZ clients

Gen XYZ investors have been the most likely to drop their financial professionals during the pandemic, according to Fidelity Institutional research.

Acorns to launch custom portfolios in push toward active investing

Acorns to launch custom portfolios in push toward active investing

Active engagement is part of the fintech’s larger mission to incentivize healthy investing behaviors that align with customers' best interest, according to CEO Noah Kerner.

In search of adviser tech’s holy grail

In search of adviser tech’s holy grail

An ecosystem is emerging whose ultimate goal is to increase advisers’ wallet share by enabling them to unify a client’s entire financial world onto a single platform.

Robinhood launches 24/7 phone support

Robinhood launches 24/7 phone support

The free trading platform rolled out round the clock customer service following a recruiting spree of financial advisers turned customer service reps.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print