Founded in 2000, Pirum has developed uniquely effective technology that sits at the heart of the stock lending market, delivering efficiency and improving trading effectiveness and collateral management for the banks, hedge funds, asset managers and custodians that participate in this space.
Pirum’s SaaS platform provides a secure hub for over 120 clients, processing more than $2 trillion of trades and collateral daily. By replacing manual, time critical procedures, its platform improves efficiency, saves money, reduces risk and helps meet regulatory compliance standards.
Pirum’s technology stand outs for its straightforward and low-cost implementation. The data feeds that drive trading are accepted in virtually any format. No additional hardware, software or proprietary network connections are needed by its users. Pirum’s fully hosted platform performs all the necessary data processing and user access is provided via secure web pages over the internet, facilitating more modern working environments, including remote working.
Why we invested
Bowmark saw that Pirum held a powerful position at the nexus of financial institutions relying on its software to navigate the complex, lengthy and multi-party process of securities lending, where borrowers, lenders and lending agents interact. Pirum has enviable customer retention rates approaching 100% with clients seeing the platform as “mission critical”.
As Managing Partner Julian Masters pointed out: “Eighteen years of uninterrupted revenue growth was a great testament to Pirum’s management team.” Bowmark led a buyout in April 2019, supporting CEO Rajen Sheth’s strategy to continue to grow and evolve the business.
Already the European market leader, Pirum had opportunities ahead. It was ready to break into new areas, from operations into collateral management, asset servicing and the front office, including trade and collateral optimisation. Pirum could also tap into the compliance needs created by the Securities Finance Transaction Reporting (SFTR), Central Securities Depositories Regulation (CSDR) and Uncleared Margin Rules (UMR). Geographically, the USA represents 40% of the stock lending market and was an obvious destination for expansion. Furthermore, the asset classes of OTC derivatives and repo, with larger volumes than stock lending, were crying out for a high-quality post-trade solution.
“We help our clients to exploit opportunities as the industry and regulatory landscape is changing all the time,” said Rajen Sheth, now Pirum’s President. “We needed to invest to employ the best developers, keep innovating and stay in front of changes in business processes to meet our strategic vision. That’s why we were keen to work with Bowmark.”
The story so far
A strong relationship has developed between the Bowmark team and Pirum’s management. We supported Rajen in his move to President from CEO, enabling him to step away from the day to day running of the company while staying actively engaged with the business that he built. In August 2020 Commercial Director, Phil Morgan, stepped up to CEO and the business has brought on a Financial Director, Chief Commercial Officer and Chief Technology Officer.
These changes have freed up the commercial division to focus more on customer acquisition and service. With our backing Pirum has developed new products, including a SFTR solution, collateral management, corporate actions and front office services, and connectivity with the USA’s DTCC.
Revenues from new products have increased from £1m to £4.5m, a 50% growth in EBITDA. A data reporting suite has been implemented allowing management to monitor performance indicators, including environmental and social governance standards. A biannual off-site is now held where strategic imperatives are considered, with quarterly product appraisals also underway.
The company has grown from 60 to 110 employees. An annual meeting gives the whole team a chance to get together and discuss strategy. To motivate employees, the bonus scheme has been made more transparent and the opportunity to participate in “sweet equity” has been extended to a greater number of key personnel. By monitoring employee churn and retention, it is possible to see marked improvements in both these measures of staff satisfaction.
Pirum’s designs has led it to win multiple industry awards and, in 2020, for the fifth year running, it won ISF’s prestigious Global Post Trade Service Provider of the Year, also taking top marks in the categories of Market Connectivity, Proportion of STP, Reconciliation Ability and User Interface.
Rajen commented: “With Bowmark’s investment and support, we’ve been able to expand our product portfolio, take on the US market and ensure our whole team is part of the journey. Pirum now has a strong foundation for rapid expansion.”
Pirum’s multi-tenanted SaaS platform enables 180 financial market participants to process $3.5 trillion of trades and collateral daily
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