JPMorgan Chase's Neovest subsidiary acquired LayerOne Financial.
JPMorgan's Neovest Acquires LayerOne Financial: A Leap Forward in Fintech Disruption
In a move that signifies a significant leap forward in the ongoing disruption of the banking industry by fintech companies, JPMorgan's subsidiary Neovest has announced the acquisition of investment management platform LayerOne Financial.
On Friday, Neovest made the announcement, with Jimmi Shah, the CEO of Neovest, stating that the acquisition is part of Neovest's objectives to create an exceptional client experience and expand product capabilities. The specific strategy behind this acquisition is to enable clients to manage their full investment lifecycle with one software provider.
Founded by Kyle Zasky in 2015, LayerOne Financial had a growing client base with $100 million assets under management by the next year, following a spin-off from Fortress Investment Group in 2017. Zasky, who is also the CEO of LayerOne Financial, believes the acquisition is the right next step for their people, clients, and business.
The technology of LayerOne Financial is seen as well-suited to help Neovest advance and differentiate from other investment management platforms. LayerOne's clients can currently monitor portfolios, conduct risk assessments, send orders to brokers, perform compliance checks, and manage their positions. With this acquisition, Neovest aims to offer a powerful, cohesive, and holistic offering.
The deal's financial terms were not disclosed. However, it is worth noting that JPMorgan acquired Neovest in 2005. The acquisition of LayerOne Financial by Neovest is a notable example of fintech disruption in the banking industry, reflecting the diversity of fintech disrupters and the various schools of thought on how to disrupt the banking space.
It is also suggested that JPMorgan's Neovest may have purchased licensing rights through the acquisition. This could potentially open up new opportunities for Neovest in the future.
This acquisition comes amidst a backdrop of increasing fintech disruption in the banking industry. There are as many schools of thought on how to disrupt the banking space as there are disruptors. The acquisition of LayerOne Financial by Neovest is a testament to the power of strategic acquisitions in driving this disruption forward.
However, it's important to note that this acquisition is not without its past implications. In 2021, Neovest paid a $2.75 million Securities and Exchange Commission penalty for operating as an unregistered broker-dealer, which was the first time the SEC charged an order and execution management system provider for this offense.
As the fintech landscape continues to evolve, acquisitions such as this one are likely to become more common. The acquisition of LayerOne Financial by Neovest underscores the importance of strategic acquisitions in driving fintech disruption forward and creating exceptional client experiences.
