Rep.: Your wealth management tech solutions company just closed on three acquisitions, including the purchase of software provider Tamarac. Were there any surprises along the way?
Jud Bergman: We’ve got a very good team that does these. Pete D’Arrigo is our financial officer and he’s a very experienced acquirer. We’d known both firms for a while. Prima Capital Holding was close to two years in coming together, and Tamarac was 14 to 16 months in coming together. You learn a lot in that process. We take our time in getting to know the people and the culture and the products, and that pays dividends. Surprises are not something you want to happen.
Rep.: How are Envestnet and Tamarac alike?
JB: Very advisor-focused, entrepreneurial, innovative.
Rep.: Envestnet stock fell 11 percent the week your first-quarter earnings came out. Why?
JB: We did talk about the Tamarac transaction; while we are very optimistic about the future of that product suite, it will be slightly dilutive to us in the short run—2 to 4 cents in the second quarter. The Street likes people to grow, they love accretive transactions.
Rep.: What’s the long-term outlook?
JB: We believe our core business can grow at 20 percent a year over the longer term. We think Tamarac is going to grow faster than that. It’s a much smaller base of revenue. And what they offer solves a difficult practice management problem that had no solution in an efficient, automated way. They’re providing rebalancing and reporting in a single practice management application. There are other companies that provide rebalancing software, but none that offers the fuller practice management suite which would include CRM and performance reporting. The integration of these practice management tools around a rebalancing application, that’s the value proposition there.
