The global financial services sector continues to go through a period of relative flux. Governments and regulators are becoming more interventionist, while many financial institutions in developed economies continue to face the need to de-lever and retrench. At the same time, consumers are demanding simpler, more transparent and often digital products. In business services, attractive secular tailwinds are shaping many sub- sectors: emerging market growth, increasing movement of people and goods, the growth of public and private sector outsourcing, and the impact of growing regulation and compliance.
In the financial services sector, we are focused on payments, insurance, financial technology, online financial services, carve-outs from financial institutions and asset management. Payments continues to generate attractive deal flow given Advent’s experience in the sector, and strong market fundamentals in both developed and developing markets. In insurance, we focus on innovative business models that are unlocking relatively rare pockets of high-growth opportunity; for example insurers well-aligned to the changing demographics of developed markets. Financial technology and online financial services remain a core focus for Advent given the impact that new technologies and online provision are having and will continue to have on changing corporate and consumer markets. Across all these sub-sectors, we rigorously track opportunities for carve-outs and disposals from financial institutions. To date, many banks and insurers have not completed the scale of capital release they need to accomplish. Finally, in emerging markets we are also looking for fast growing asset management businesses to capitalize on the young population and emerging middle class.
In business services, we are prioritizing business process outsourcing; testing, inspection and certification; travel; marine services and education. In each of these sub-sectors we see attractive underlying growth catalysts well-aligned with global themes, and a healthy pipeline of target assets. As in financial services, we work collaboratively with our operating partners and industry executives to source distinctive opportunities. We remain particularly excited about international and transformational opportunities, such as Kroton Educacional, and TransUnion, which have always been a principal focus for Advent.