The pure-play cloud computing business firm Actua Corporation is expanding in the financial service arena with the acquisition of New York-based wealth and investment platform FolioDynamix.

The pure-play cloud computing business firm Actua Corporation, formerly ICG Group, is expanding in the financial services sector with the acquisition of New York-based wealth and investment platform FolioDynamix.

Pennsylvania-headquartered Actua is to acquire an approximately 97 per cent primary equity interest in cloud-based FolioDynamix for an estimated $199 million in cash, subject to transaction expenses and “true-up” adjustments for working capital, cash, debt and other items.

The acquisition, which is subject to various closing conditions, is expected to close in the fourth quarter of 2014.

The move is a sign of increased momentum in the wealth management sector of the desire among many industry players for cloud-based solutions. The main operating efficiencies gained from using cloud technology include seamless remote access, security/guaranteed backup, cost savings, no hardware limitations and time savings, according to the 2013 FOX Family Office Benchmarking: Technology in the Family Office study. However, concerns about security and privacy emerged – somewhat predictably – as the biggest factor holding back family offices from using cloud technology. While the FOX study is based solely on responses from family offices, its findings are indicative of wider industry trends.

FolioDynamix offers wealth service providers and investment advisors a cloud-based wealth management technology platform and advisory solutions across all account types including unified managed account and unified managed household programs.

Subject to final accounting - including purchase accounting - adjustments, FolioDynamix would bring to Actua a current net revenue run rate of over $30 million (approximately $50 million on a gross revenue basis).

Doug Alexander, president of Actua, said his firm has been following FolioDynamix since 2010.

“ FolioDynamix exemplifies the Actua vision of leveraging the power of the cloud to transform vertical markets and processes,” Alexander said.

“The continued flow of assets into managed accounts and model portfolios, the need for wealth management firms to innovate and modernize both programs and technology, combined with the trend toward adopting new platform solutions, provide a significant opportunity for FolioDynamix to grow its position as an industry leader,” said Joseph Mrak, CEO of FolioDynamix.

Actua Corporation works with cloud businesses and has over 650 employees.