The Business and Financial Services sector is extremely diverse and subject to a wide range of external factors including the de-leveraging of the banking system after the financial crisis, increasing regulation, and the deepening penetration of IP technology in product and service delivery. Valuations have risen sharply and attractive investment opportunities remain scarce.
Nevertheless, Advent continues to devote significant resource to the sector, consistently focusing on a group of service providers, transaction processors and software companies that tend to have technology at their heart. Market growth is a common thread to our activities across geographies. We look for secular growth underpinned by robust trends, strong business models with high margins and cash generation, and transformational opportunities from carve-outs and under-invested state-owned and family businesses. The regulatory environment is also a very important driver as increasing regulation forces restructuring and divestitures from large financial institutions and spurs the growth of companies that assist their clients with regulatory compliance.
Our sourcing efforts are focused around four main themes: In payment processing we anchor our growth thesis around cash and checks being replaced by electronic payments - a secular trend that withstood the downturn in consumer spending and we believe has years more to run. In niche insurance we see areas of growth and opportunities for re-engineering particularly in distribution and the back office. Back office administration and services benefit from the trend for outsourcing and the need for scale, trends that Equiniti is taking advantage of to provide high volume administration services to public and private sector customers in the UK. We continue to focus on carve-outs from financial institutions, especially in Europe, where we have seen deal flow improve. We use our strong track-record from deals like Vantiv and WorldPay to actively target new opportunities, and not just in payment processing.
On the development side, we continue to spend time on financial technology, especially in the US and in software. A new development cell for 2014 is testing, inspection and certification (TIC) services, particularly in Europe. This is a high growth but fragmented market, driven by increasing regulation and the requirement for companies to prove their adherence to standards. Finally, in emerging markets, we are also looking at fast-growing asset management and asset servicing businesses. InverCap and Alianza Fiduciaria are two recent investments that are able to capitalize on population growth and the increasing penetration of financial products in Latin America.