Last month, RIABiz named Advent President Pete Hess “the most influential figure in the RIA business going into 2012.” It was great to see Pete recognized for leading the charge in changing the way Advent serves the advisory market. When he reached out to me a year ago to start a conversation about how Black Diamond and Advent could work together, I couldn’t have imagined that our two companies would partner, let alone join forces – and as surprised as I was to get Pete’s call, I know that many of our clients were shocked by the news. I’m grateful to all of you for believing in us and giving us a chance to prove to you that we, together, could accelerate Black Diamond’s ability to provide great solutions and service and keep earning your business every day.

I’m proud and honored to report that the last 12 months have been our best year ever – in fact, we added more than 80 new clients, expanding the community of Black Diamond clients to over 340 firms. That means that there are more people than ever helping us to enhance and grow the platform and find new ways to support advisor workflows and help our clients do great things. We are also in beta on our rebalancer solution, which we built to be intuitive, smart and native to the platform for maximum ease-of-use and workflow productivity. We designed it that way because we realize that every efficiency gain we can deliver to our clients’ workflow means more opportunities for our clients to focus on growing their businesses and delivering amazing client service.

We’re excited about our rebalancing solution and are working on many other things to improve our clients’ productivity. Every day since we started Black Diamond almost eight years ago, we have asked ourselves how we can be the best possible partner to our clients – and that has stayed true to this day. In their profile on Pete, RIABiz proclaimed that this merger “may, in retrospect, prove to be far and away the most significant and positive event [for advisors] in 2011.” We think this is just the beginning.  Partnering with the industry pioneer has added fuel to our engine, and we have so many exciting opportunities ahead to help our clients in even more powerful ways. I personally look forward to, and am humbled by, the opportunity to continue helping advisors on their path to greatness.

Reed Colley is Senior Vice President and General Manager of Black Diamond. Reed joined Advent in 2011 and is responsible for setting the company’s Advisory strategy and leading Advent’s Black Diamond business unit.

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With the recent acquisition of Black Diamond, and the many conversations with our clients, our partners and our employees, we’d had the exciting opportunity to ask ourselves these fundamental questions.

We are that rare thing: a company big enough and healthy enough to know that we will be around for at least another 28 years, but small enough to make adjustments and refinements to our strategies in response to our market’s evolving dynamics.

What hasn’t changed is our goal: to significantly increase the value we bring to clients and strengthen our culture, building the foundation for great performance over the long term.

How are we going to do that? By staying focused on five key strategies that are client-centric:

• Lead the global hedge fund/alternative manager community by offering innovative solutions with unparalleled depth, flexibility, and scale.
• Foster the growth and success of asset managers around the world with innovative, localized functionality, ease of use, and convenience of ownership.
• Deliver innovative, simple and elegant solutions to help advisors be great.
• Earn our clients’ admiration every day with an unparalleled client experience.
• Lift Advent higher through a commitment to enriching our global culture, people and community.

Why these strategies? Because if we do right by our clients, by each other, and by our community, Advent will prosper as a company and be well set up to deliver continued client and employee growth over the long term.

Earlier this week, Pete Hess and Reed Colley participated in a Black Diamond client web seminar. Below are some highlights from the session.

Pete Hess: After having spent a few weeks on the road and meeting with a few Black Diamond clients, some of our custodial partners, and some Advent clients, I think I have a good understanding of the questions and concerns you might have. Advent, through its own journey, came to the realization that the advisory market place requires a much higher degree of focus than we have been giving it in the past. We are thrilled to be partnered with Black Diamond, who we believe is the strongest player in that market and an outstanding company, that we actually expect will help Advent be a better company.

Reed Colley: We know this was a little surprising – why Advent? Candidly, it’s a little surprising to me personally to be sitting here four months [after my first call with Pete], presenting this. We’ve always been looking for the opportunity to grow our impact on the market and grow our ability to help you on your path to greatness. We’ve explored a lot of things to help us get there, many of those discussions prompted by you as partners, telling us where we should we going over time. Four months ago, Pete gave called me and shared his vision for the market and what he thought we could do together for the market, and his idea of what we could do together as a combined entity.

Honestly, my perception of Advent and their philosophy and strategies was not the one he was sharing.  So my management team decided to dig in a little bit more – and what we found out was, they were a lot different than we thought. And meeting with the senior leadership team, we were just incredibly impressed at every turn. You could pretty much take any member of their team, folks we’ve gotten to know over these last couple months, and put them into Black Diamond and they would be a phenomenal fit and a phenomenal teammate inside of our organization.

Throughout this, Advent has been really clear with us – Pete and Stephanie DiMarco have been really clear – they want to cultivate what makes us great. They do not want to change Black Diamond. They just want to add fuel to the engine. And, you know, we pushed on that – saying, “well, gosh you’ve done this for 28 years, you’ve got to have your own ideas about this…” And they said, “You know, we think for this space – advisory – you’ve got the right solution, and you’ve got the right partners and clients, and we want to continue to see that grow and foster it as much as we can.”

Pete Hess: We recognize that they are a different company, operating with a different foundation – a pure SaaS-based deployment model, a different development model – they have a lot of best practices, frankly, that we’re going to be adopting across all of Advent. And, from a cultural perspective, we see them as a very strong addition to Advent, and we’ll be emulating a lot of what they do. So the experience and the learnings will not just flow from Advent to Black Diamond but probably equally from Black Diamond back to Advent, which was one of the big attractions of this “marriage.”

To view the complete web seminar, click here.

In the three weeks since announcing our partnership with Advent, we have traveled the country meeting with clients and partners, while connecting via phone and email with many more.  It has been an amazing and positive experience.  Open, honest dialogue is the lifeblood of our partnership and I want to personally thank all of you for your genuine and passionate feedback.

Today, we announce that we have officially closed the transaction, and Black Diamond is now leading the advisory strategy for Advent as an independent business unit.  As we move forward, we carry with us the messages we heard from you:

1. Keep your focus on partnership and client service
2. Continue to innovate
3. Don’t lose your culture

Advent and Black Diamond are committed to holding true to the vision and values that have defined us to this point, and I personally recognize that it is our job to continue to provide great solutions and service to keep earning your business. As an independent business unit within Advent, our service organization and agile product and engineering teams, among others, will continue to operate just as they have up to now and your team will remain the same. Additionally, with the support, resources and expertise of the broader Advent organization, we look forward to accelerating the pace of innovation by focusing on the following:

1. Accelerated delivery of value-add features to the BlueSky platform based on your workflow and needs
2. Direct leverage of Advent’s 28 years of expertise in portfolio accounting and data management resources, such as ACD and ACA
3. Increased ease of data conversion for those wishing to move from other systems, including Advent’s Axys platform

I believe in the innovation and value the Black Diamond and Advent partnership can deliver to advisory firms – but I also realize talk is cheap, and we have to prove this combination is as beneficial as we expect it will be for you.

We look forward to the honest feedback of our clients and partners to ensure we continue to innovate in ways that best meet your evolving needs. We are excited about what lies ahead and I personally look forward to, and am humbled by, the opportunity to help you on your path to greatness.

Last week, I was on the road with Reed Colley, meeting with Black Diamond clients, Advent clients, key custodial partners and the press. Two themes came across loud and clear: 1) the acquisition by Advent has great potential for the advisory community if we execute well; and 2) executing well means empowering Reed and his organization with the resources and freedom to continue to strengthen the unique Black Diamond culture of innovation in product and service. Advent has every intention of doing exactly that.

We encountered universal support for our strategy of purpose-built solutions and organizations focused on specific market segments (hedge funds, asset managers and advisors.)  Once the deal closes, the key for our joint company will be finding the right ways to combine strengths so that Black Diamond can accelerate its ability to help clients strengthen their advisory practices. The guiding principle here is ensuring that being part of Advent helps Black Diamond to run even better, faster and stronger.

As I heard in many of my meetings last week, Black Diamond knows the business of advisors better than we do, and that’s why Reed and his management team will lead both our strategy and execution. We are excited to prove the benefits of Advent and Black Diamond joining forces to benefit the advisory community.

Thanks again for the comments and feedback we’ve received. I wanted to share some answers to a few of the questions we’ve heard most often since the announcement:

1. What does this mean for the future product plans of BlueSky and APX?
   Our goal is to deliver products that make our clients even better, and we’ve seen that work best with purpose-built solutions — with Black Diamond, that means focusing on advisor needs, and with APX, that means increased focus on global HNW and institutional asset managers. The investment levels won’t change – if anything, we think this acquisition will accelerate the value we bring to clients of those platforms, as both teams benefit from greater clarity and shared best practices.
2. Does this mean you’re getting rid of Axys?
   No. We will continue to support Axys clients for the foreseeable future – it’s a stable, scalable platform that works for thousands of firms. The value here is that, if and when current Axys clients choose to migrate to a new solution, they will have a choice – the choice of migrating to Black Diamond, APX (locally installed or hosted via Advent OnDemand), or Geneva – and we can say with tremendous confidence that we will have a platform purpose-built to help them grow their business and service their clients.
3. What happens to me if I use Advent (or Black Diamond) through a custodian? Will anything change?
   No. We will continue to support our custodial channels just as vigorously as we always have across all the products they count on us to deliver.
4. Why should we believe this is different from what happened with TechFi ten years ago?
   We know this question is on many people’s minds. I assure you that there is virtually no similarity between this acquisition and TechFi. The people, the strategy, the products, the economic environment and Advent’s own financial health are all very, very different. There were difficult and painful decisions made around TechFi ten years ago, which, at the time, were unfortunate but necessary. We have no interest in repeating that painful history!

We are really looking forward to closing the transaction so we can begin working in earnest together and making our vision a reality. We understand that actions speak louder than words – we will demonstrate in the weeks, months and years to come that we are committed to Black Diamond, to the market, and to helping our clients be more successful.

In the first few days since the Black Diamond announcement, we have received lots of feedback from clients, partners, employees and investors, and I’m very encouraged by the reaction. Most people recognize what we recognized: a tremendous strategic alignment between the two companies.

Ultimately, the success of any merger rests on the people. One note I received summed it up: “As someone who has been a close observer of the industry for quite some time, I congratulate and commend you on the strategic acquisition of Black Diamond. Reed and his team have been fantastic partners to our firm, and we look forward to an expanded relationship now with you as well.” From my earliest conversations with Reed, we were struck by the similarity between the cultures of the two companies. We both founded our companies with one core belief – help clients be successful – and now we’re coming together, united by that purpose. We believe great things will result. Thanks to all of you who share that belief – and for the rest of you, we are excited by the challenge of changing your minds!

I’m thrilled to announce that Advent Software has entered into an agreement to acquire Black Diamond Performance Reporting.

When we founded Advent almost 30 years ago, many of our very first clients were advisory firms looking to grow their businesses by harnessing the power of technology. Most of those firms are still our clients today and I’m so proud that Advent has played a role in their success. The advisory market has changed and grown dramatically in recent years, as have the technology needs of firms in the space.

Over the past few years Advent has invested significantly in innovating for alternative managers and asset managers, but we realized we needed to do more to support advisory firms.

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