ADVS » Topics » Our Industry and Clients

These excerpts taken from the ADVS 10-K filed Mar 13, 2008.

Our Industry and Clients

        Advent's core clients are institutions that manage, advise and perform recordkeeping functions on financial assets. Examples of these institutions include global and US-based asset managers, registered investment advisors, prime brokers, fund administrators, hedge funds, family offices and banks and trusts. Our MicroEdge clients include corporations, public funds, foundations, universities and non-profit organizations that perform related portfolio management functions. We have a diverse client base ranging from small clients to some of the largest institutional clients in the world. In fiscal 2007, 2006 and 2005, no single customer accounted for more than 10% of our total net revenues. Geographically, though the US continues to represent our primary market, international sales have grown by 20% and 19% in 2007 and 2006, respectively.

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        The past ten years have seen a transformation in the global investment management landscape. There have been fundamental and rapid changes that include: global wealth creation that has driven steady growth of traditional assets under management and the increase of assets managed in alternative strategies; the creation of increasingly complex securities instruments used by the hedge funds and in alternative strategies; significant increase in cross border flows and global investment activity; and the evolution and maturation of electronic markets. All of these factors have created opportunities for our investment manager clients, but they have also resulted in substantially increased complexity in their operations and processes. We believe that investment managers have clear needs that translate into demand for Advent solutions: portfolio accounting and analysis; trade order management and post-trade processing, account management and ever-increasing requirements to comply with evolving industry standards and government regulations.

        As we enter 2008, we note a number of trends that we expect to affect the investment management industry:

    Continued turmoil in the credit markets and volatility in financial markets;

    Expanding and increasing efforts by European investment managers to comply with MiFID—The Markets in Financial Instruments Directive—which went into effect November 1, 2007 and is driving strategic technology changes to support requirements for best execution, trading transparency and other measures for investor protection;

    Increased scrutiny of fees and motivation to maximize investment performance relative to common indices ("search for Alpha") forcing global investment managers to better differentiate their additional value through client service and improved performance analysis tools;

    Increased demands from regulators and institutional investors for more sophisticated reporting and operational transparency; and

    Steady growth of investment management firms and sovereign wealth funds in the Middle East and Asia driving demand for investment management technology and services.

        These trends have increased the volume and complexity of information and data flows both within investment management organizations and between these organizations and third parties, such as brokerage firms, clients, custodians, banks, pricing services and other data providers. Consequently, in order to operate more efficiently, investment management organizations continue to automate and integrate their mission-critical and labor-intensive functions, including: (i) investment decision support; (ii) trade order management and compliance; (iii) portfolio accounting, performance measurement and report generation; (iv) client relationship management; and (v) straight through processing that includes connectivity and data integration. Investment management organizations historically have relied on internally-developed systems, third-party systems, outsourced services or spreadsheet-based systems to manage these information flows. Investment management organizations are demanding highly functional, easy-to-use, scalable, flexible and cost-effective software applications. Because the primary mission of our customers is to manage money for their own clients effectively and efficiently, we find more and more institutions that seek to streamline their operations, including decreasing the complexity that results from having multiple technology vendor relationships. We believe this streamlining of operations is a trend that will continue, meaning the marketplace will continue to recognize the value the integrated suite of products that Advent offers.

Our Industry and Clients



        Advent's core clients are institutions that manage, advise and perform recordkeeping functions on financial assets. Examples of these institutions include global
and US-based asset managers, registered investment advisors, prime brokers, fund administrators, hedge funds, family offices and banks and trusts. Our MicroEdge clients include
corporations, public funds, foundations, universities and non-profit organizations that perform related portfolio management functions. We have a diverse client base ranging from small
clients to some of the largest institutional clients in the world. In fiscal 2007, 2006 and 2005, no single customer accounted for more than 10% of our total net revenues. Geographically, though the
US continues to represent our primary market, international sales have grown by 20% and 19% in 2007 and 2006, respectively.



4









        The
past ten years have seen a transformation in the global investment management landscape. There have been fundamental and rapid changes that include: global wealth creation that has
driven steady growth of traditional assets under management and the increase of assets managed in alternative strategies; the creation of increasingly complex securities instruments used by the hedge
funds and in alternative strategies; significant increase in cross border flows and global investment activity; and the evolution and maturation of electronic markets. All of these factors have
created opportunities for our investment manager clients, but they have also resulted in substantially increased complexity in their operations and processes. We believe that investment managers have
clear needs that translate into demand for Advent solutions: portfolio accounting and analysis; trade order management and post-trade processing, account management and
ever-increasing requirements to comply with evolving industry standards and government regulations.



        As
we enter 2008, we note a number of trends that we expect to affect the investment management industry:





    Continued
    turmoil in the credit markets and volatility in financial markets;


    Expanding
    and increasing efforts by European investment managers to comply with MiFID—The Markets in Financial Instruments Directive—which went into
    effect November 1, 2007 and is driving strategic technology changes to support requirements for best execution, trading transparency and other measures for investor protection;


    Increased
    scrutiny of fees and motivation to maximize investment performance relative to common indices ("search for Alpha") forcing global investment managers to better
    differentiate their additional value through client service and improved performance analysis tools;


    Increased
    demands from regulators and institutional investors for more sophisticated reporting and operational transparency; and


    Steady
    growth of investment management firms and sovereign wealth funds in the Middle East and Asia driving demand for investment management technology and services.



        These
trends have increased the volume and complexity of information and data flows both within investment management organizations and between these organizations and third parties,
such as brokerage firms, clients, custodians, banks, pricing services and other data providers. Consequently, in order to operate more efficiently, investment management organizations continue to
automate and integrate their mission-critical and labor-intensive functions, including: (i) investment decision support; (ii) trade order management and compliance;
(iii) portfolio accounting, performance measurement and report generation; (iv) client relationship management; and (v) straight through processing that includes connectivity and
data integration. Investment management organizations historically have relied on internally-developed systems, third-party systems, outsourced services or spreadsheet-based systems to manage these
information flows. Investment management organizations are demanding highly functional, easy-to-use, scalable, flexible and cost-effective software applications.
Because the primary mission of our customers is to manage money for their own clients effectively and efficiently, we find more and more institutions that seek to streamline their operations,
including decreasing the complexity that results from having multiple technology vendor relationships. We believe this streamlining of operations is a trend that will continue, meaning the marketplace
will continue to recognize the value the integrated suite of products that Advent offers.



This excerpt taken from the ADVS 10-K filed Apr 3, 2007.

Our Industry and Clients

Advent clients, which include asset managers, investment advisors, prime brokers, fund administrators, hedge funds, family offices, banks and trusts, are organizations that manage, advise or perform recordkeeping functions on financial assets. Our clients also include corporations, public funds, foundations, universities and non-profit organizations that perform similar portfolio management functions. In fiscal 2006, 2005 and 2004, no single customer accounted for more than 10% of our total net revenues. Our international sales represented 12% of our total net revenues in 2006, compared to 11% in 2005 and 9% in 2004.

The investment management industry has experienced periods of both significant growth and contraction in recent years, which contributes to varying levels of demand for our software products. Nevertheless, Advent addresses a clear need in the market: investment managers continue to face complex portfolio accounting and management requirements as well as extensive and evolving industry standards and government regulations.

These trends have increased the volume and complexity of information and data flows both within investment management organizations and between these organizations and third parties, such as brokerage firms, clients, custodians, banks, pricing services and other data providers. Consequently, in order to operate efficiently, investment management organizations automate and integrate their mission-critical and labor-intensive functions, including: (i) investment decision support; (ii) trade order management and compliance; (iii) portfolio accounting, performance measurement and report generation; and (iv) client relationship management. Investment management organizations historically have relied on internally-developed systems, third party systems, outsourced services or spreadsheet-based systems to manage these information flows. Due to limitations in each of these types of systems, investment management organizations are demanding highly functional, easy-to-use, scalable, flexible and cost-effective software applications.

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We experience seasonality in our license revenue. The fourth quarter of the year typically has the highest license revenue, followed by lower license revenue in the first quarter of the succeeding year. This seasonality results primarily from customer budgeting cycles and to a lesser extent from the annual nature of some Assets Under Administration (“AUA”) contracts which are assessed and billed on an annual basis. We expect the impact of this seasonality will be reduced in the future as we move more of our licenses to a term model, under which we generally recognize revenue from term licenses ratably over the period of the contract term which is typically three years.

For additional information regarding factors that affect the timing of the recognition of software license revenue, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations / Critical Accounting Policies and Estimates / Revenue Recognition.”

This excerpt taken from the ADVS 10-K filed Mar 16, 2007.

Our Industry and Clients

Advent clients, which include asset managers, investment advisors, prime brokers, fund administrators, hedge funds, family offices, banks and trusts, are organizations that manage, advise or perform recordkeeping functions on financial assets. Our clients also include corporations, public funds, foundations, universities and non-profit organizations that perform similar portfolio management functions. In fiscal 2006, 2005 and 2004, no single customer accounted for more than 10% of our total net revenues. Our international sales represented 12% of our total net revenues in 2006, compared to 11% in 2005 and 9% in 2004.

The investment management industry has experienced periods of both significant growth and contraction in recent years, which contributes to varying levels of demand for our software products. Nevertheless, Advent addresses a clear need in the market: investment managers continue to face complex portfolio accounting and management requirements as well as extensive and evolving industry standards and government regulations.

These trends have increased the volume and complexity of information and data flows both within investment management organizations and between these organizations and third parties, such as brokerage firms, clients, custodians, banks, pricing services and other data providers. Consequently, in order to operate efficiently, investment management organizations automate and integrate their mission-critical and labor-intensive functions, including: (i) investment decision support; (ii) trade order management and compliance; (iii) portfolio accounting, performance measurement and report generation; and (iv) client relationship management. Investment management organizations historically have relied on internally-developed systems, third party systems, outsourced services or spreadsheet-based systems to manage these information flows. Due to limitations in each of these types of systems, investment management organizations are demanding highly functional, easy-to-use, scalable, flexible and cost-effective software applications.

4




We experience seasonality in our license revenue. The fourth quarter of the year typically has the highest license revenue, followed by lower license revenue in the first quarter of the succeeding year. This seasonality results primarily from customer budgeting cycles and to a lesser extent from the annual nature of some Assets Under Administration (“AUA”) contracts which are assessed and billed on an annual basis. We expect the impact of this seasonality will be reduced in the future as we move more of our licenses to a term model, under which we generally recognize revenue from term licenses ratably over the period of the contract term which is typically three years.

For additional information regarding factors that affect the timing of the recognition of software license revenue, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations / Critical Accounting Policies and Estimates / Revenue Recognition.”

This excerpt taken from the ADVS 10-K filed Mar 31, 2006.

Our Industry and Clients

        Our clients include a range of organizations that manage, advise or perform recordkeeping functions on financial assets. They include asset managers, investment advisors, prime brokers, fund administrators, hedge funds, family offices, banks and trusts. Our clients also include corporations, public funds, foundations, universities and non-profit organizations that perform similar portfolio management functions. In fiscal 2005, 2004 and 2003, no single customer accounted for more than 10% of our total revenues. Our international sales represented 11% of our net revenues in 2005, compared to 9% in 2004 and 7% in 2003.

        The investment management industry has experienced periods of both significant growth and contraction, which has led to varying levels of demand for our software products by investment management organizations. Nevertheless, investment managers continue to be faced with complex portfolio accounting and management requirements, as well as extensive and evolving industry standards and government regulations, with which they have to comply.

        These trends have increased the volume and complexity of information and data flows within investment management organizations and between these organizations and third parties, such as brokerage firms, clients, custodians, banks, pricing services and other data providers. Consequently, in order to operate efficiently, investment management organizations automate and integrate their mission-critical and labor-intensive functions, including: (i) investment decision support; (ii) trade order management and compliance; (iii) portfolio accounting, performance measurement and report generation; and (iv) client relationship management. Investment management organizations historically have relied on internally developed systems, third party systems, outsourced services or spreadsheet-based systems to manage these information flows. Due to limitations in each of these types of systems, investment management organizations are demanding highly functional, easy-to-use, scalable, flexible and cost-effective software applications.

        In addition, we experience seasonality in our license revenue. The fourth quarter of the year typically has the highest license revenue, followed by lower license revenue in the first quarter of the succeeding year. We believe that this seasonality results primarily from customer budgeting cycles and expect this seasonality to continue in the future, although if we are successful in moving more of our licenses to a term model, we believe the impact of this seasonality will likely decrease.

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