TA returns to financial services

ESecLending is the latest financial technology company to be bought by the Boston-based firm, in what could be the first investment for TA’s new $3.5 bn fund.

TA Associates announced today it will buy securities lending company eSecLending from London-based Old Mutual Plc for an undisclosed amount.

ESecLending manages securities lending programs for global institutional investors, including several of the largest pension funds and investment management companies in the US and Europe.

The funding for this investment will come from whatever is left of $2 billion fund TA IX and also from TA’s new fund, the $3.5 billion TA X, which TA announced yesterday it had closed. Depending on when the eSecLending deal closes, it could be the first investment for TA X.

TA has invested in a number of companies that provide technology to the financial market. Similar TA investments have included the online broker Ameritrade, which TA exited with a 5x return, and electronic marketplace operator Intercontinental Exchange. The firm will continue to look for opportunities in this sector for its new fund.

“[eSecLending] is another example of a company that is introducing transparency into what has been an opaque process, managed by custodians,” said Kenneth Schiciano, a managing director at TA.

Schiciano said that an added bonus from investing in these types of companies is that TA can help the company grow by introducing them to some of their investors.

“We make the introduction, it’s up to them to develop a commercial relationship, “ he said.

Schiciano added that TA may look into building eSecLending through acquisitions.