There might be light at the end of the tunnel, but it ain’t here yet.
Euroclear-Goji deal marks private market turning point
This is a big deal – you do not get more mainstream than this.
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Global securities settlement house Euroclear has acquired private markets fintech Goji, as it moves into private markets valued currently at $9.8tn. For all sorts of reasons, this is a big deal.
London-based Goji provides customers with digital access to private markets by working with asset managers, fund administrators and asset owners. The platform serves nearly 30,000 investors across 80 jurisdictions.
The investment in Goji will allow Euroclear to expand its footprint into private markets and provide clients with a one-stop shop offering a spectrum of products from exchange-traded funds (ETF) to private funds, the group said in a statement.
The deal follows the acquisition of fund distribution platform MFEX in 2021.
‘Our partnership with Goji supports our ambition to enter the private markets space,’ said Lieve Mostrey, CEO of Euroclear.
‘We see a strong demand from the market for more scalable and digitalised solutions and, given the opportunities, it makes perfect sense to add this capability to our portfolio of services.’
Euroclear has more than 2,000 clients globally and holds a total of €37.6tn ($40tn) of assets in custody for them. Around 295 million transactions are completed on the platform each year, according to its website.
David Genn, CEO of Goji, said: ‘The ever-increasing demand from all investor groups to access private funds points to the need for an end-to-end digital processing solution for these asset classes.
‘The combination of Euroclear’s position in the funds industry with Goji’s technology and experience means we can deliver a solution together that will serve and transform the private markets industry.’
According to Preqin, private capital assets are expected to increase to $18.3tn by the end of 2027, with retail investors driving the next wave of growth.
Private assets have been slowly becoming more mainstream. Earlier this year, fund distribution platform Allfunds announced a partnership with fintech iCapital to provide private market funds to its clients.
Amplify comment
Selin Bucak, Citywire alternatives correspondent
Euroclear is one of two major clearing houses in Europe. It is also one of the oldest settlement systems, with a wide range of clients, including banks, broker-dealers and other institutions.
It plays an important role in the functioning of European capital markets. According to its website, its entities hold some 55% of European capital market securities and more than 60% of eurobonds.
The acquisition of Goji will mean Euroclear can provide access to a full spectrum of vehicles. For such a big organisation in the securities, mutual fund and ETF world to open up its platform to private assets is telling. It proves the willingness of the wider investment world to widen distribution in this area.
But this deal in particular could be a turning point.
Despite several recent developments, from new structures to digital platform launches, investors have been reluctant to funnel a significant amount of capital into private funds. I have heard that a reason for this is that it remains too complicated.
However, if you are already using Euroclear for securities and mutual funds, this deal means you can easily buy private funds using the same system you have been using for years. It might just make it easier to take the leap.
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