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Milestone succumbs to BNY Mellon
Geoff Hodge, founder and chair of Milestone Group, one of the Australian fintech success stories of the past 20 years, is to finally cash out. BNY Mellon is to acquire the now-global business.
The two companies announced the transaction last Friday (July 9 Australian time), saying that it would benefit the existing clients of both organisations. While BNY Mellon’s asset servicing links to Australia are not as strong as they used to be, it is still either the largest or second-largest custodian in the world (the lead with State Street changes regularly).
The deal follows closely behind the takeover of Australian-based Mainstream Group, which is still subject to final shareholder approval, for $415 million by the global financial admin company Apex, following a three-month bidding duel.
For BNY Mellon, the most prized asset at Milestone is the ‘pControl’ unit pricing business, which is seen as a world leader and will help the custodian on its path to provide full front-to-back systems for its funds management and pension fund clients.
It will also leverage Milestone Group’s institutional fintech heritage, ‘pControl’ digital solutions and ‘pControl SmartSourcing’ cloud services to extend and enhance BNY Mellon’s open architecture and flexible operating model approach.
However, Roman Regelman, BNY’s chief executive of asset servicing in New York, said: “We gain both industry-leading technology as well as the expertise that Milestone is known for globally. This is a significant step in our continuous evolution – blending leading edge technologies and services to deliver greater efficiency and value for our clients.”
He said that by acquiring Milestone, the bank would “advance the digitisation and automation of core accounting and asset services, delivering increased accuracy and timeliness”.
It would also expand BNY Mellon’s digital offerings and core capabilities, adding OCIO (outsourced CIO or implemented consulting) services, cash allocation and fair value control solutions to the existing suite of NAV solutions, Regelman said.
Hodge, who has had many approaches to sell the business over the years and is known to have seriously entertained one or two, forged an alliance with BNY last year to create a suite of oversight and contingent net-asset-value services for BNY clients which were seeking independent oversight and backup NAV capabilities.
Hodge was previously the director of operations at the former Rothschild Australia Asset Management (subsequently acquired by Westpac) before launching Milestone in 1998.
He said: “We’re excited about becoming part of BNY Mellon and are committed to making this a seamless experience for all of our clients. We are proud of the reputation we have built at Milestone over the last two decades and the industry innovation we’ve delivered…”
The deal, financial details of which have not been disclosed, will be closed later this year.
