While 2025 is not shaping up as the banner year for M&A that most observers had expected, some strategic deals are still getting done, especially those that were agreed upon before the Trump administration’s “Liberation Day” tariffs on April 2.
A case in point is Clearwater Analytics, a $450 million, publicly held provider of investment management software and services for corporate and institutional asset owners and managers. The company signed definitive agreements for multiple acquisitions early this year to round out its portfolio of offerings.
In one deal, worth $1.5 billion, Clearwater agreed in January to acquire Enfusion, an investment management platform.
Additionally, the company in March agreed to pay a combined $685 million for Beacon Platform, a risk and modeling platform for derivatives, private credit and debt and other alternative assets; and Bistro, a Blackstone-owned portfolio visualization software platform. Beacon and Bistro are designed to work together.
The CFO at the helm of the acquisitions, Jim Cox, knows his way around M&A, having been involved in numerous deals — as both buyer and seller — while serving as finance chief for Clearwater and three other technology companies over the past decade and a half.
CFO.com recently met with Cox — a customer of Clearwater at several companies before coming aboard in 2019 — to talk about the current M&A environment and the strategy behind Clearwater’s recent deals.
Jim Cox
CFO, Clearwater Analytics
First CFO position: 2009
Notable previous employers:
- Glassdoor
- Lithium Technologies
- Advent Software
- PricewaterhouseCoopers
This interview has been edited for brevity and clarity.
DAVID McCANN: What is your take on the current environment for M&A?
JIM COX: There are many layers to thinking about the M&A landscape, and one is obviously the overall economic environment and an acquirer’s ability to pay. Can you obtain the needed capital?
April 3, the day after “Liberation Day,” was the busiest day in the history of our platform. Everyone was trying to figure out their exposure. There was a lot of upheaval at that point.
What’s interesting now is that there’s been so much vacillation in thinking about what will result from the tariff policies that I think the market is beginning to accept them. I’m not sure whether that’s the right or wrong thing to do, but some people are saying, “Yes, there is uncertainty, and I’m not sure how that’s going to be resolved, and I need to live my life.” There have been some large M&A announcements, and the IPO market has started to open back up.
Is it tougher than normal to raise funding for M&A?
Up until March, it was very good — world-class. And then the market closed up for a while. [If our deals were earlier in their lifecycles], we might have had to consider a different approach.
Are you confident the acquisitions will be successful in the current economic environment? Research has shown that more than half of M&A deals underperform in the months following deal announcements, in terms of share-price movement.
I think that’s a safer approach that equity investors generally take: Wait and see. They’re looking for proof points, and that will be our job over the next nine months.
But by doing an M&A transaction, you’re implicitly showing confidence in your business. You have to have that to take on the challenge of operating at a larger scale.
“By doing an M&A transaction, you’re implicitly showing confidence in your business. You have to have that to take on the challenge of operating at a larger scale.”
Jim Cox
CFO, Clearwater Analytics
We did these deals because we were listening to our customers, who were telling us they liked us and wanted us to do more for them. The deals were about fortifying our growth for the next 10 years. And it’s obviously hard to tell investors they have to wait 10 years to know whether a deal worked out.
Thinking back across all the deal-making you’ve been involved in during your career, how often are you surprised by their eventual financial impact?
Of course, you’re always surprised. There’s always something you didn’t know that comes to light afterward, where you understood things one way, and now you understand them a different way.
With respect to listening to your customers, aren’t there times when customers don’t really know what they want, and it’s up to you to show them?
That’s the classic Henry Ford saying: My customers would have asked me to make a better horse, and I built an automobile instead because they needed that.
But the most successful deals, in my history, are those where you’re not pushing it on your clients, but rather your clients are pulling you in that direction. Even the most revolutionary ideas are developed and perfected with customer iteration.
How do you handle the reality that M&A usually results in duplicative roles and the need to make human capital choices?
That is never pleasant. It’s a tough situation, so what can you do to make it as humane as possible? One thing is, be very clear with people, be deliberate but decisive, and then be done, so you can turn to everybody at the company and say, this is the team going forward. You don’t want “death by a thousand cuts.” That’s the worst.
Looking at your recent transactions, was Enfusion considered to be a competitor of Clearwater Analytics?
Not exactly, because they served hedge funds and asset managers, while we served more institutional asset managers and owners. There wasn’t much customer overlap.
Here was the strategic rationale: What we were doing was accounting, reporting and performance and risk management for investments. All of that was after trades occurred. But there are lots of activities involved in determining whether to make a trade. What Enfusion does is called order management, which provides information in real time.
What was the strategic underpinning of the Beacon and Bistro deals, and why did you announce a single acquisition price for them?
Beacon is a risk system that quants use to do sophisticated risk calculations pre-trade, and Bistro is a set of assets that help visualize the Beacon quantitative platform. They had two separate owners, but they work together.
