Carlyle in all-equity software deal

The Carlyle Group has made an all-equity investment in financial services software provider ITRS Group. It joins a number of firms dodging the challenging debt market by underwriting the entire deal.

The Carlyle Group has bought financial services technology company ITRS for an undisclosed amount. A source close to the deal said the price tag was in the range of €50 million and €100 million. 

The firm used all equity in the deal, which is becoming increasingly common in the private equity market as banks tighten lending. Fernando Chueca, director of Carlyle’s European Technology team, said that all-equity transactions provide more flexibility, giving firms more freedom to operate without third-party involvement. 

ITRS provides the financial services sector with software that monitors trading. Its main product is called “Geneos”, which monitors and manages an institution’s trading activities. ITRS has 600 installations and has offices in London, New York, Hong Kong and Manila.

The recent UBS scandal involving rogue trader Kweku Adoboli, who lost $2.3 billion for the firm by exploiting a certain trading loophole, is an example of why companies will want to improve their risk management systems. Chueca also believes that the software for the financial services sector is a good place to invest as organisations keep on improving their trading infrastructure to meet regulatory requirements.  

The investment was made from Carlyle Europe Technology Partners II, and is the €530 million fund’s fourth new investment this year. It was closed in November 2008 and makes small- to mid-size investments in the buyout and growth capital sectors. Following the transaction, the fund is about 50 percent deployed, according to a person close to the deal.