The Fund initiated a new position in SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) during the quarter. SS&C is a leading provider of mission-critical software products and services that allow financial service companies to automate and outsource business processes. SS&C offers a vast portfolio of applications and services for portfolio management and accounting, financial modeling, trading, treasury management, and in particular, fund administration. The company’s products offer critical functionality to users, carry high ROIs relative to internally-developed software or paper-based processes, and are needed to meet regulatory requirements. We were able to acquire shares at attractive prices during the quarter due to market concerns about the health of the company’s hedge fund administration business. We believe that SS&C is poised to generate accelerating organic growth as it benefits from its enhanced scale and an improved competitive environment in the fund administration space, cross-sells products and services to its dramatically expanded customer base, and focuses on revenue growth from the integration of the Advent, Citi and Wells Fargo’s fund administration services, Conifer and Primatics acquisitions. SS&C now has a business that will generate almost $500 million per year in free cash flow, which opens up optionality around capital deployment, including continued M&A activity, deleveraging and a potential return of capital to shareholders.
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- SSNC 15-Year Financial Data
- The intrinsic value of SSNC
- Peter Lynch Chart of SSNC
From the Baron Opportunity Fund first quarter 2017 shareholder letter.