It's difficult to avoid
hearing about compliance: the subject is discussed daily in
the media, in corporate boardrooms and at all levels in the
private and public sectors. In working closely with our
Limited Partners, 38
of the world's leading financial institutions, we have
identified key corporate initiatives arising from current and
pending compliance mandates domestically and internationally.
We are actively collaborating with our Limited Partners to
identify software and services companies that deliver
solutions addressing these pressing needs.
To put the opportunity in perspective,
U.S. public
companies are expected to spend $2.5 billion on Sarbanes-Oxley
compliance alone. This is in addition to the $11 billion that
U.S. banks, insurance and securities companies will spend by
2005 to comply with anti-money-laundering regulations
specified by the USA Patriot Act (source: Celent).
Corporations will also have to meet the new and increasing
regulatory requirements of Basel II, HIPAA and the
Gramm-Leach-Bliley Act, among others including those issued by
the SEC. (Read
more)
The encouraging trends we
identified in the second half of 2003 are solidifying and
confirming our investment theses. We continue to find the
investment climate attractive.
Some
of the themes we are enthusiastic about in 2004 and
are actively pursuing include:
Regulatory
Compliance
The
demand on all public companies - and financial services
companies in particular - to comply with a host of new
securities and governance regulations has created a
significant opportunity for software companies.
Security/Disaster
Recovery
The
proliferation of threats to the extended enterprise, coupled
with the growing volume of data that needs to be protected, is
continuing to drive growth in demand for security/disaster
recovery solutions.
Business
Intelligence/Analytics
This
$5.5 billion market will continue to grow due to
Sarbanes-Oxley regulatory requirements and competitive
pressures to increase revenue while reducing costs by
leveraging data resident in the disparate silos throughout the
enterprise.
Payment
Services and Processing
Immense
market potential exists in the payments, outsourcing and
processing services sector. This extends from merchant credit
card processing services to healthcare insurance claims and
payments processing solutions.
Corporate
Training
As
the economy continues to improve, large financial institutions
and corporations in many industries are increasing their
investment in human capital and have a renewed focus on
educating employees through online and instructor-led
methodologies.
Offshore
Outsourcing
The
trend in global outsourcing is accelerating as quality
improves and significant efficiencies are realized.
