Fortent Combines Searchspace, Semagix

According to the company, this new combination, for the first time, sets a global standard for risk and compliance services. Warburg Pincus, the global private equity firm, has provided a significant equity commitment to the company.

In the wake of 9/11 and other terrorist activity around the globe, regulators have increased the pressure on financial institutions to stem the flow of money laundering and address the estimated $500 billion to $1 trillion of “dirty money” slipping through the world’s financial markets each year. With this stepped up law enforcement and the broad new requirements of the USA PATRIOT Act and Bank Secrecy Act, financial institutions are in a rapidly changing, often confusing regulatory environment which exposes them to reputational, operational, and financial risks, as well as potential criminal charges.

“The combination of Searchspace and Semagix is an unbeatable one-two punch in the risk and compliance area, and what is exciting is that this is only the beginning,” said Sandy Jaffee, CEO of Fortent. Ms. Jaffee joined Fortent from Warburg Pincus where, as Entrepreneur-in-Residence, she was part of the team that acquired Searchspace and Semagix. Prior to joining Warburg Pincus, she served as President and CEO of Citibank’s Global Securities Services.

As part of its expanding global footprint in risk and compliance, Fortent also provides Fraud Management Solutions that identify unusual and suspicious behavior, targeting risk that directly affects a company’s bottom line. In addition, this fall Fortent will launch a comprehensive subscription-based News and Information Service addressing regulatory developments.

Supplementing the industry-leading technology systems of Searchspace and Semagix, both of which will retain their names as product brands under Fortent, is a management team recruited from executive positions in the regulatory area and major financial institutions. “This ‘bankers talking to bankers’ approach is Fortent’s signature,” observed Tony Terracciano, a leading voice in the banking industry for over three decades and a member of Fortent’s Board of Directors. “Risk and compliance are major areas of concern for a CEO, and the fact that Fortent knows how financial institutions and regulators think makes them invaluable as a business partner and advisor.”

“When Warburg Pincus was looking to invest in the risk and compliance area, we interviewed more than 75 CEOs, regulators, industry advisors, and consultants around the world,” said Mimi Strouse, a Warburg Pincus managing director and Fortent’s Chairman of the Board. “We consistently heard the need for a comprehensive solution, and we set out to find the best. After researching over 180 vendors in the compliance-risk industry to find the company with the best products, clients, expertise, and reputation among the world’s leading financial institutions, we found that company in Searchspace, which became the launch pad of this new enterprise.”

In addition to Sandy Jaffee, Mimi Strouse, and Tony Terracciano, other Fortent board members include Rich Green, Executive Vice President of Software, Sun Microsystems, Inc.; James Neary, a Warburg Pincus managing director; and Peter J. Wallison, former White House Counsel and General Counsel to the U.S. Treasury Department.

Observed Mr. Wallison, “Regulators both here and abroad put the responsibility for managing risk and compliance strictly at the top of the organization – the CEO and the Board. This is a C-suite issue, and Fortent is the company that provides the combination of technology and expertise to address its strategic importance.”