Technology and platform provider Envestnet has inked its second deal less than three months after asset manager BlackRock bought close to a 5% stake in it.
Envestnet said late Thursday that its Tamarac business is buying PortfolioCenter, Schwab’s portfolio management and reporting technology for RIAs — a move that was not wholly unexpected, says one industry insider.
“Given the deep interconnectedness of Tamarac and PortfolioCenter and Schwab’s RIA network’s increasing usage of Tamarac and the diminishing utilization of PortfolioCenter independently, this deal has been rumored for a while and it makes sense for Envestnet, Schwab and their mutual clients,” said Gavin Spitzner, president of Wealth Consulting Partners.
Plus, Spitzner points out, now it’s clear what Envestnet Chairman and CEO Jud Bergman and President Bill Crager “were thinking about when they took the $123 million from BlackRock in November.”
About a month ago, Envestnet’s Yodlee unit purchased Abe AI to boost advisors’ and financial firms’ conversational artificial intelligence abilities, so they can interact with clients via Amazon Alexa and Google Assistant, for instance.
“We’re excited about the opportunity to acquire PortfolioCenter,” according to Adina Anderson, head of Envestnet | Tamarac. “With more than a decade of experience supporting RIA firms leveraging the integration between PortfolioCenter and our comprehensive platform, this acquisition will enable us to provide an even higher level of service to our RIA clients.”
The firm says that its RIA clients have been using PortfolioCenter as the back-end data application with Tamarac’s portfolio management and rebalancing applications “for years.” Some 3,000 advisory firms use PortfolioCenter either directly from Schwab Performance Technologies or from Envestnet | Tamarac.
Advisors rely on portfolio-accounting software to run their practices, says Anderson, and PortfolioCenter is “one of the most widely trusted solutions.”