Financial Services Overview
BVP has decades of experience investing in the financial-services industry. As far back as the 1970s Bessemer invested in bank services roll-ups. Since the 1980s and 1990s, Bessemer has been an active investor in banks. And in the last ten years, the firm has become increasingly active in areas as diverse as capital-markets technology, wealth management, specialty finance, proprietary trading and research. Bessemer invests in financial-services companies across stage and geography. Members of the team have each spent several years working in the financial- services industry prior to joining the firm. With our expertise, experience and an extensive network of contacts throughout the industry, we can understand and anticipate the changes occurring in this rapidly evolving sector.
Most of our financial-services focus is concentrated in three major areas: asset management and personal finance; trading technology; and research and information services. All three industries are in the midst of fundamental change driven by technology.
In the asset-management and personal-finance sector, we have watched a generation of investors lose their confidence in a financial system marked by volatile markets and, often, imprudent advice from so-called “experts”. We believe small investors have been poorly served by the existing wealth-management industry and that a new generation of businesses, leveraging technology and transparency, will be built to provide best-in-class service to clients regardless of their level of wealth.
The trading technology space has evolved dramatically over the last decade. Spreads and commissions have narrowed, brining trading costs down. At the same time, market volume has increased, driven in part by the introduction of high-frequency trading. New securities of increasing complexity have entered the market. We believe there is an opportunity for new companies to provide a new class of infrastructure to address the rapidly evolving capital markets.
Research and information services have grown in importance as more information has become available to market participants. We believe investment returns increasingly depend on access to proprietary information and an investor’s ability to parse that information quickly. Investors have begun to demand greater accountability from their information providers and more transparency to ensure freedom from conflicts. So we believe there are opportunities for innovative companies to enter the market by providing new types of information to investors or by providing research or information that is more accurate, transparent and reliable than existing products in the market.