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Goldman Spinoff Simon Tops $800 Million as WestCap Invests

·2 min read

(Bloomberg) -- Simon Markets, a financial-technology platform that spun out of Goldman Sachs Group Inc., secured up to $100 million in a financing round led by growth equity firm WestCap.

The funding round will enable the New York-based firm, which counts financial advisers as users, to expand into alternatives like private equity and hedge funds, as well as digital assets such as cryptocurrency funds, Chief Executive Officer Jason Broder said in an interview. Simon may also seek to expand into Europe and Asia, make strategic acquisitions and invest in portfolio analytics tools.

The transaction values Simon at more than $800 million, people with knowledge of the matter said. The company was developed at Goldman Sachs and was spun off in 2018. Goldman is an investor in Simon, as is Barclays Plc, Credit Suisse Group AG, HSBC Holdings Plc, JPMorgan Chase & Co., Prudential Financial Inc. and Wells Fargo & Co. Existing investors participated in the latest round.

“We’ve experienced incredible growth since the spin-out,” said Broder, citing a tripling in volumes to $25 billion in calendar 2020 from the year prior. Simon is on track to double that figure in 2021, he added.

The company’s platform provides wealth managers across the U.S., including Raymond James Financial Inc. and Nationwide. It offers access to structured investments such as market-linked notes, defined outcome ETFs and registered index-linked annuities which Broder says offer a level of protection against current market volatility.

Roughly 100,000 financial professionals have access to Simon, and about 30,000 have used it in the year to date. That’s a figure that Broder says the firm will seek to boost in part through education about structured products, which are known for being complex, and by bolstering offerings.

“Simon is demystifying the alternatives space,” said Kevin Marcus, a WestCap partner who is joining the company’s board. Financial advisers will have to change as technology advances and as clients demand more interaction, he said. WestCap’s bet on Simon was partly fueled by its belief that the wealth-management industry will increasingly shift toward alternatives from traditional asset classes, he added.

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