While growing in the 1980s in Danville, a rich suburb Californian, Andy Stewart, 12, opened an account with the Charles Schwab discount brokerage in nearby San Francisco and put all the gains from his tour of paper in an investment fund.
Living in California, "you can not help but get sucked into the tech universe," says Stewart. "People think that fintech is a relatively new phenomenon, but Charles Schwab was one of the first online discount brokers."
After graduating from the University of California, Santa Barbara, Stewart studied at the Indiana University School of Law. His college friends teased him to spend time scrutinizing the Wall Street Journal in the library but, after qualifying as a lawyer, his interest in the markets paid off. Stewart has continued to manage alternative investment activities with some of the world's largest asset managers and investment banks, including Credit Suisse and BlackRock.
These days, Stewart is a founding and managing partner of 44 years of Motive Partners, a new private equity firm based in New York and London that specializes in investing in fintech companies. In the last year, Stewart flew to Ireland "over a dozen times", for scouting agreements and partnerships.
Clonakilty visits culminated last week in Motive Partners buying a 40% share in the Global Shares of the city of West Cork, a cloud-based software and services developer to enable multinationals in more than 100 countries to manage plans sharing for employees. The pharmaceutical giant GSK and the Italian insurer Generali count among its 250 blue-chip customers.
The financial terms of the transaction were not disclosed, although sources claim that Motive paid $ 25 million (€ 21.4 million) for the minority stake in the 13-year-old company. Global Shares is one of the leading providers of stock management software, a market valued at $ 2 billion a year and one that is expected to grow by an average of 5% annually.
Employee numbers at the Clonakilty company, which posted a 60 percentage point increase in sales compared to the previous year, rose from 68 in 2015 to 175 today and now has 10 offices worldwide.
Global Shares will use the capital of Motive Partners, the expertise and contacts of Fintech to accelerate expansion. Stewart, who has worked 100 hours a week to reach the conclusion of the agreement, says that job creation at Global Shares will probably continue at the same pace and that the investment will help the Cork company to open an office in Japan, extend its United States and Europe, and develop new software.
The participation of Motive Partners in Global Shares estimates the company at 62.5 million dollars. Richard Hayes, the president of the Cork company, was thinking about the stock market debut for 2020 and Stewart says he would not rule out a long-term initial public offering.
Stewart's trips to Ireland have also led Motive Partners to provide a 25 million euro cash injection at the start of the year from the Ireland Strategic Investment Fund (ISIF), a sovereign development fund of 8.9 billion euros.
After the foundation of Motive Partners in 2016, he dedicated "a bit of time to map out where the interesting parts of the fintech universe are and which included not only the industry but also geography," he says. Stewart. "So let's look at how big the market is, how much competition there is, what the winds are against blind, and one of the things that has continued to tick was Ireland, with a highly educated workforce and a long tradition of working in both financial and technological services. "
Some of the 25 million euros in Motive Partners' funding received from ISIF went to buy the Global Shares stake, says Stewart. The strategic partnership is destined to produce even more investments, although not necessarily in Ireland.
Motive Partners defines itself as an investor who builds, buys and sustains the companies that will form the backbone of the infrastructure of the world's future financial services. Global investments in fintech companies reached record levels in 2017, Accenture program figures.
"Our model is based on our ability to add value beyond just dollars," says Stewart.
This year, the company has established Motive Labs, a fintech innovation and investment center that includes Allied Irish Banks as its founding strategic partner. Motive Labs has opened a 14,000-square-foot center in Canary Wharf in London, where Fintech's AIB teams and other partners can collaborate with startups to create new products and services for the industry.
"We work with financial organizations to collaborate on resolution Information security and data are a major concern, and there are challenges such as those that govern rules such as PSD2 (the second payment services directive that forces banks to open their technology platforms to third parties) "
Motive Partners is considering whether to open an office for Motive Labs in Dublin. In fact, Stewart believes that due to the emergence of Ireland as a global fintech hub, the country is a natural alternative to the United Kingdom for companies looking for an EU presence to protect themselves from the problem. impact of Brexit and for private equity firms seeking to capitalize on the growth of indigenous fintech companies.
However, Brexit has not discouraged his commitment to the London financial hub. The British Brexit negotiators would have told their counterparts in Brussels that about 7,000 European investment funds based on British customers will be affected by regulators unless the EU changes its position on the city of London after Brexit.
I think it is in the interest of everyone who has a hard landing on Brexit, so we hope for the best and we are preparing for the worst, "says Stewart." We are interested in working with other jurisdictions such as Ireland. , which is a part of the English-speaking European Union, has family regulations to the Anglo-Saxons and regulators friendly. "
Motive Partners, which is composed of veterans of the fintech industry and investors, was established at the end of 2016 to capture a slice of the $ 700 billion spent by financial institutions on technology each year – in fact, the company quoted by Goldman Sachs estimates that $ 4.7 trillion in annual revenue is at risk of displacement by new technology-enabled entrants.
Also boasts a global advisory council studded with stars, including Larry Summers, the former US Treasury Secretary, chairman of Microsoft John Thompson, and former president of the HSBC Douglas Flint.
Stewart also has a decent pedigree. He joined Motive Partners with BlackRock, the world's largest wealth manager. There, he was co-responsible for BlackRock's alternative investments, overseeing teams investing in property, hedge funds and private equity. It has helped grow the business for over $ 120 billion in assets under management and over $ 1.2 billion in revenue. While working for BlackRock, he also spent time in Cork, where the American money manager was acquiring renewable energy resources.
Prior to this, Stewart was head of Credit Suisse's liquid alternative group, which moved to Man Investments in 2010 where he served as president and chief operating officer for his US operations following the 2008 financial crisis.  Says that being at Credit Suisse in the aftermath of the crisis was "a fascinating moment" because "some banks and wealth managers were using technology as a way to become more efficient – a nice way to say" cut costs " – but also to innovate things that they could not do historically ".
"I saw to man how technology was taking more and more office space, and BlackRock now has some of the best fintech technologies and is working hard to present itself to the market as a technology company rather than as a wealth manager.  "Those pressures to become more efficient continue. Consumers are used to having everything available on their phone and now require the same from financial institutions. Consumers can use Netflix and Amazon to get what they want when they want it. But if their bank or asset manager is 20 years behind, their clients will not tolerate it. "
However, investors should not be dazzled by companies that inflame their value simply by using key words like" machine learning "or" blockchain ", says Stewart: blockchain, or digitalized registers of cryptocurrency transactions without central accounting which were initially developed as an accounting method for bitcoins, are now attracting financial institutions and exchanges wishing to replace costly and inefficient accounting and payments
Indeed, Stewart had warned last year that the fintech ratings were " sparkling "or at prices that did not correspond to the underlining performance of companies.
Motive Partners is "positive" about technologies like blockchain and artificial intelligence but remains "skeptical about some of the companies behind it," says Stewart.
"It's definitely worth investing, but it depends on which companies you're talking about in particular and at what prices you're buying," he says. "There is a long history of overestimating the short-term impact of a technology company and underestimating the long-term impact: just look at the dotcom bubble – many companies that have been built on the Internet and they do not exist now. "  Sunday Indo Business