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Fidelity Equity makes second European investment

The firm committed $37 million of its $500 million fund to purchase a minority stake in Complinet, a London-based financial information services provider.

Fidelity Equity Partners will pay $37 million (€24 million) for a minority stake in Complinet, a London-based provider of online regulatory solutions for financial firms. The investment, set to be completed in April, is the second deal made by Fidelity Equity’s London operation since the company expanded its operations there last fall.

“The strategy of our fund is to back high growth international service businesses. Complinet fits very well into that,” said Fidelity partner Sebastian McKinlay, who joined the European office in October of last year and will now join Complinet’s board of directors along with vice president Stephen Findlay. Fidelity Equity may pursue refinancing the deal in the next 18 months, McKinlay said.

McKinlay partially attributes the London office’s success in deal-sourcing to Fidelity Equity’s relatively recent birth.

“We’ve got the benefit of not having a legacy portfolio to manage,” said McKinlay.

Fidelity Equity closed its first fund last year on $500 million. The international fund focusses on investing in high-growth midsize businesses in North America and Europe with enterprise values ranging from $50 million to $150 million.

Complinet, founded in 1997, provides software suites, compliance data, and staff training publications to keep financial companies abreast of the latest changes in regulatory issues. The firm is currently contracted by more than 1,200 companies, including Morgan Stanley, UBS, and the Royal Bank of Scotland.

We've got the benefit of not having a legacy portfolio to manage.

Sebastian McKinlay

Complinet’s annual revenues are growing at 40 percent, according to McKinlay, and the firm is expanding its operations in the US, Middle East and Asia. Fidelity is counting on an increased wave of regulatory pressures to spur Complinet’s continued growth.

Last summer, Fidelity Equity purchased a majority stake in a similar company, paying an undisclosed sum for Dutch information management firm Asset Control.

The firm is affiliated with Boston-based mutual fund giant Fidelity National Financial. Its North America operations, based in Boston, are led by Brooke Ablon, a former partner with buyout firm The Riverside Company, while the London office is led by Nick Martin, a former founding partner of HgCapital.