GTCR is a leading private equity investor with a long history of investing in financial services companies and financial technology companies. Even during financial market turbulence, this sector has remained a large, dynamic and attractive segment of the economy. As well, innovations in financial products and financial technologies will continue to create attractive investment opportunities going forward. Strong managers can significantly impact performance in these areas, and the array of industry segments, business models and market dynamics is well suited to GTCR’s time-tested Leaders Strategy approach.

Financial services investment opportunities include the full spectrum of business models involving the bearing of risk and the management of capital. These include banking, lending/finance, brokerage, asset management and insurance. Most of these businesses have a strong regulatory component, and cost of capital is often a critical consideration. GTCR tends to focus on less cyclical areas where risk-adjusted returns are consistently attractive. We are also attracted to businesses with substantial franchise value, strength of distribution and barriers to entry; these tend to be rewarded with above-average returns on capital.

Financial technology investment opportunities encompass those technology and services businesses around the financial services complex. These businesses often serve as vendors to financial services companies, or they participate in the delivery of a financial product or service to businesses or consumers. Typically, these businesses earn recurring subscription or transactional revenue and have high incremental contribution margins with a fixed cost operating structure. With organic and inorganic growth and the inherent operating leverage of the business model, these companies exhibit attractive margin expansion and earnings growth. Financial technology companies are often oriented to an individual financial services vertical, such as payments or banking, or they may offer a horizontal product that has applicability across several financial services verticals.

Through our team of highly resourceful investment professionals, we have consistently identified attractive financial services and financial technology opportunities. The firm’s current and past investments include: VeriFone (NYSE: PAY), the leading provider of secure electronic payment technology solutions for financial institutions, merchants and consumers; Gensar, TransFirst and NPC, leading providers of merchant bankcard services; Alliant Resources, a consolidator of insurance brokerages; Transaction Network Services (NYSE: TNS), the dominant provider of managed network services to the payments industry; ConvergEx, a leading agency brokerage and investment technology company created in partnership with Bank of New York Mellon; Private Bancorp (NYSE: PVTB), a Chicago-based commercial bank and wealth management services provider; and IronShore, a rapidly growing provider of excess and surplus property & casualty insurance coverage.