SS&C Technologies Holdings Inc (SSNC) 2012 Q1 法說會逐字稿

Good afternoon. My name is Patrick, and I will be your conference operator today. At this time, I would like to welcome everyone to the SS&C Technologies 2012 first quarter conference call. At this time, all participants are in a listen only mode. Later we will conduct a question-and-answer session. We will be taking questions in the order we receive them. Please note that this conference is being recorded and will be made available on the SS&C's website at www.SSCtech.com. I would now turn the call over to Bill C. Stone, Chairman and Chief Executive Officer. Mr. Stone, you may begin your call.

Thanks, Patrick. Welcome and thank all of you for joining us for our Q1 2012 earnings call. I'm Bill Stone, Chairman and CEO of SS&C. With me today is Norm Boulanger, President and Chief Operating Officer, and Patrick Pedonti, Chief Financial Officer.

Before we get started, we need to review the Safe Harbor statement. Various remarks we may make on this conference call about our future expectations, plans and prospects constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors. These are included in SS&C's filings with the Securities and Exchange Commission, in particular the Company's annual report on Form 10-K for the year ended December 31, 2011.

I'm going to start with a brief overview of the quarter and then turn it to Norm, who will take you through some operational highlights, and then Patrick, who will take us through the financials. After that, I will summarize, and we will open it up to questions. Let's begin with an overview of first quarter results.

We had first quarter revenues of $93.7 million, a gain of 5.2%. Software enabled services were up 11.9% in the first quarter to $64.6 million. We achieved GAAP net income of $17.9 million up 81.8% and adjusted non-GAAP net income of $23.1 million up 20.4% over the first quarter of 2011. SS&C's software enabled services contributed 68.9% of the revenue in the quarter, compared to 64.8% for the same period last year.

License revenue declined 42% in the quarter and was the main reason for falling short of our revenue projections. In addition, some of the Q1 projected key license sales have been delayed. Annual run rate basis recurring revenue, defined as our addition of maintenance and software enabled services, was $84.1 million for the quarter -- first quarter of 2012, an annual run rate of $336.3 million. This represents an increase of 8.9% from $77.2 million, and $308.7 million run rate in the same period of 2011, and an increase in 0.9% from Q4's 2011 $83.3 and $333.2 million run rate. Remember these our GAAP recognized revenue numbers.

Now we continue to invest in our sales force, and we have some great leadership in sales. In Q1 we added to our sales leadership team with the appointment of Punit Satsangi as our Managing Director of Business Development in EMEA. We are looking for someone who is not only able to cultivate business opportunities, but also someone who had an in-depth knowledge of financial services industry and, in particular, fund administration. We are confident that Punit will be a key player as we further penetrate the EMEA market.

We have also added sales talent in our other offices including New York City, Minnesota, Chicago and Toronto. I speak regularly with our sales teams, and they are excited about the products and services that they are offering. They know we deliver huge value to our customer, and they also know the importance and relevance of the technology innovation and expertise within our organization.

We are delivering operational transparency, and it's one of the most important drivers of our growth and a competitive advantage in virtually every financial institution in the world. And our solutions constantly highlight operational transparency. In 2012, we continued our approach of adding to our capabilities through acquisitions. On February 29 we announced our intentions to acquire Thomson Reuters PORTIA business. PORTIA provides a broad set of middle- to back-office capabilities that allow investment managers to track and manage the day-to-day activity in their investment portfolio. Its offering will complement SS&C's existing solutions portfolio and build upon our success in technology development and cloud and mobility expertise.

The acquisition adds over 140 staff across locations in Boston, Bangalore, London, Hong Kong, Singapore, Tokyo and Bangkok. Christy Bremner, PORTIA's President, will continue in her current leadership role, and we expect to close on this deal any day now.

You have also been seeing press releases we issued regarding GlobeOp Financial Services. Following TPG's announcement to withdraw its offer, we continue to encourage shareholders to accept SS&C's offer. We see the combination of SS&C and GlobeOp as a compelling business. The combined SS&C GlobeOp business we believe will delight our customers with an expanded product and service suite, offering exciting opportunities to our employees and create value for shareholders.

In 2012, cloud technology's infrastructure and it's mobility enablement are revolutionizing investment management. The concentration of investment expertise and the ability to drive performance puts a premium on 24 by 7 access. SS&C recognizes this and have begun to deploy our new tagline Don't Wonder. Know. Anything. Anytime. Anywhere.

We believe this encapsulates what is happening in the global investment world. We entered 2012 intent on driving our message home to our customers and prospects. We intend to become nothing less than our customers' most strategic technology and services vendor. Our end-to-end fund administration reporting portals and app mobility apps are just the beginning. We are investing in voice-recognition, virtualization and dynamic rich risk assessment.

Our portal technology makes it possible to manage the asset management lifecycle from a single user interface. With 22,000 end users and counting our www.SS&CFundServices.com portal and mobile applications enable access to key performance, financial and operation metrics and analytics. Finally, we are hosting today's call from our annual client summit in Charleston South Carolina. There has been a lot of buzz generated at this year's conference as we showcase our latest innovations in Mobility Ink, voice annotation, and reporting portals. Now I will turn it over to Norm for some operational highlights.

Thanks, Bill. In Q1, growth was driven by our Fund Services business. Our reputation, professional account and talent, and a leading technology platform, including our new Form PF solution, continue to generate growth and fund pipeline for hedge funds, fund of funds and private equity firms. Our licensed results were disappointing, as some larger deals we anticipated closing in Q1 were delayed. Our investment in automation our infrastructure and expense management allowed us to hit our earnings targets, despite a weak license quarter.

As Bill mentioned, we were very active in the due diligence process for PORTIA and GlobeOp in Q1. While working to close these transactions, we have been laying up steps necessary to drive growth and operational synergies. Both acquisitions present significant cross-selling and integration opportunities. In the case of GlobeOp, our combined Fund Service business will be a top three hedge fund administrator based on assets under management. Both PORTIA and GlobeOp have talented people, and we feel will strengthen our capabilities and our ability to drive growth.

In Q1 we closed several opportunities including a New York City-based fund of funds manager, who selected SS&C as the administrator of their fund of Hedge Fund business. The service includes accounting and online reporting via our web portal, including fund liquidity. A New York City-based private equity manager selected SS&C as administrator for over $3 billion in private equity assets. A multi billion-dollar hedge fund manager based in New York selected SS&C to administer their offshore fund with over $1 billion in assets. And a prominent fiscal arbitrage fund in New York selected Recon for exception management and mass volume processing of over 1 million trades and positions daily.

We also continue to see Canadian investment firms that are investing in their operational infrastructure. A large Canadian bank with increased account growth expanded their use of Recon to improve operational processes and minimize risk. A large Canadian investment manager serving institutional clients and private wealth clients across Canada expanded their use of Sylvan to streamline the performance calculation and performance reporting to their clients.

One of Canada's largest and most diversified institutional investment fund managers entered into an enterprise agreement allowing the firm access to SS&C's Sylvan application for performance, measurement, and attribution. We also made a lot of progress in Q1 on our initiative to be able to help complex alternative managers with their Form PF compliance requirements. We are working with a number of funds with regulatory assets under management in excess of $5 billion to assist their first compliance date, which is June 30, 2012.

We also have a strong pipeline in this area and expect to continue to grow this business with managers with between $150 million and $5 billion in regulatory AUM. Their deadline is December 31, 2012. We are also targeting private equity clients and non- fund administration clients with this initiative. Finally, we are hosting annual client conference this week in Charleston, South Carolina. We have multiple sessions planned on our cloud-based solutions and mobility apps. Earlier today we demonstrated a prototype of voice-recognition and gesturing which generated a lot of excitement.

Now I will turn it over to Patrick Pedonti for financials.

Thanks, Norm.

Results for the first quarter of 2012 were GAAP revenue of $93.7 million, and reported net GAAP income for the period was $17.9 million, and diluted EPS was $0.22. Revenue increased $4.7 million, or 5% over Q1 2011. Excluding acquisition revenue and the negative impact of foreign currency, organic revenue increased 3.4%. Acquisitions, including Teledata communications, the Ireland Fund Administration business, and the benefits XML business contributed $1.8 million in the quarter, and foreign exchange negatively impacted us by $200,000, as foreign currencies weakened.

Weak license revenue sales was offset by continued strong growth in the Fund Services business providing services to hedge funds, private equity funds, and fund of funds. Adjusted operating income for the first quarter was $36 million, an increase of $1.9 million or 6% from the first quarter of 2011. Operating margins increased to 35.5% -- increased to 38.5% from 38.3% in Q1 '11, as cost controls and recent acquisitions impacted margins favorably.

Adjusted consolidated EBITDA, defined in note three of the financial statements, was $37.3 million or 39.8% of adjusted revenue. This is an improvement of $1.8 million compared to Q1 '11, or 5%. Net interest expense for the first quarter was $549,000 and includes $58,000 of non-cash amortized financing cost. Interest expense is down $4.6 million from Q1 2011, as we've paid down $139 million of debt since March 31, 2011. We recorded a tax provision in the quarter $7.8 million, or 30% of pretax income. Included in the tax provision is a one-time tax benefit of $1.8 million.

We expect the GAAP effective tax rate for the full year to be in the range of 33% to 35%. Adjusted net income, defined in note four, was $23.1 million and adjusted diluted EPS was $0.28. The adjusted net income excludes $8.9 million of amortization for intangible assets, $4.2 million of deal costs associated with the GlobeOp and PORTIA acquisitions, $1.2 million in stock -based compensation, and a $4.4 million gain associated with a currency hedge related to the GlobeOp acquisition.

As of March 31 we had $49.1 million in cash and $85 million of debt, for a net debt position of $43.1 million. We generated $13.1 million in operating cash flow in the first quarter compared to $12.1 million in Q1 '11. Major cash uses in the quarter was $1.3 million for capital expenditures and capitalized software. That was 1.4% of revenue. We paid down $15 million of the revolver. We paid $10.8 million in taxes compared to $5.7 million in 2011. And our accounts receivable DSO was 51 days as of March of 2012, an increase of 7 days from 44 days as of December 2011 but down from 56 days as of March, 2011.

In financing activities, we recorded the proceeds from option exercise of $3.9 million and tax benefit related to option exercise of $536,000. Our LTM consolidated EBITDA used for covenant compliance and includes acquisitions as if owned for the full period was $153.4 million as of March, 2012.

Our EBITDA growth and lower debt position has reduced our leverage from approximately 0.7 times as of December 31, '11 to 0.6 times as of March, 2012. Our guidance for the second quarter of this year is provided, excluding any impact from the GlobeOps or PORTIA acquisitions. In addition, we have neutralized any impact of the cost of these acquisitions in our operating cash flow projections.

Our current expectation for the second quarter of 2012 is revenue in the range of $95.5 million to $97.5 million, adjusted net income of $24 million to $24.8 million, and outstanding diluted shares at 82.9 million to 83.3 million. Our current expectation for the full year is revenue in the range of $392 million to $400 million, an adjusted net income in the range of $99 million to $103.5 million. And outstanding diluted shares for the full year will be in the range of 83 million to 84.5 million. For the full year 2012, we expect cash from operating activities to be in the range of $115 million to $120 million, and capital expenditures to be in a range of 2.2% to 2.7% of revenues.

And now I will turn it over to Bill for final comments.

Thanks, Patrick.

Looking towards the rest of 2012 and beyond, we feel optimistic for our future. For the full year of 2012, we are guiding revenue to $392 million to $400 million. We continue to be encouraged by the technology recovery, and we continue to see requests from financial services firms looking to refresh their technology. We are also seeing clients becoming increasingly comfortable using our cloud-based application and service delivery to execute on their complex accounting and reporting requirements. Not only are we are well-positioned to understand the technical aspects of the cloud computing model, we are also able to bring a deep knowledge of consulting and financial services industry expertise.

I will now open it to questions. Patrick?

Thank you.

(Operator Instructions)

Mayank Tandon, Needham.

Bill, I [products] you could maybe provide a little insight into the trends across client additions, and also how the impact of volumes and AUM levels have impacted your business?

I think across the businesses -- obviously, our software-enabled services and subset of that is our fund services, has grown the fastest, with software enabled services up about 12%, and fund services up even a few points above that.

I think that across the bank technology, insurance technology, pension fund technology, and real estate technology, we have seen softness. We don't think that will continue. We think there is a lot of opportunities for us. But getting very large institutions to sign million dollar contract deals in 2012 is a challenge. That's why you have seen us driving more and more to software-enabled services that are done on an outsourced basis where we get paid monthly.

So, I think that's really what happened in Q2, but we are optimistic going forward. We have lots of new stuff happening. We have already closed a number of great deals in Q2, and we are optimistic for the future.

The deals that you mention were delayed in 1Q -- do you expect to sign them in 2Q? And have you seen any further delays in 2Q that could impact the later part of the year?

God willing, we hope they close in Q2, of course. I think we will have improved execution in Q2. I think we will have improved license revenue in Q2, and I think that right now, as of the first week in May, I think we are pretty confident. I don't know if Norm has a comment.

Yes. I think one of those organizations will wait further out to the end of the year, but another one is working to close this deal with us this quarter. So, I am optimistic our pipeline for licenses is pretty solid in Q2. The key is going to be getting signatures on these in time. I think that's going to happen.

Great. On a related note -- how are you thinking about organic growth for the rest of the year? Will that uptick from what you saw in 1Q, or should we expect that to be the trend for the rest of 2012?

We think that -- obviously, the license revenue is all organic growth. So if we've done $6 million in license revenue, that's $2.2 million on $93 million, or would have been $95.5 million or $96 million. So it would've been 2.3 points that you add on to 3.4. That gets you up to 5.7%, and I think we have got lots of opportunities to drive increasingly in software enabled services and also in our other services, our consulting business. And so we do believe that the organic revenue growth will go back to mid-single digits -- six to eight.

One final question -- Bill, can you provide a little bit of clarity on the impact of regulation on your business? Both in the US and Europe, potentially, is that going to be a tailwind, or do you see that having any kind of account impact on your business?

Sure. We think that it is going to be a tailwind. I think we are ramping up now to deliver Form PF. We have another initiative going on, on FATCA, which is the Foreign Account Tax Compliance Act. So, we believe that, that's another opportunity for us. We've gotten great feedback. One of the major investment banks, Prime Brokerage Groups, said that on Form PF, SS&C shows you a system. Every other administrator shows you a PowerPoint. So we are pretty confident that we have some great technology. We have great opportunities. We are growing our sales force. And, so we are optimistic about the future.

Great. Thank you.

Bryan Keane, Deutsche Bank.

I just want to be sure I've got it. The lowered revenue guidance -- is that due to the license sales? Or is that -- I guess I'm thinking the license sales are going to close in the year, so that would make up the difference. Or is that overall a softer demand environment? I just want to be sure I got it.

I think, obviously, when we did $93.7 million and we were hoping to do $95.5 million, you have a couple million dollars that are off in Q1. We have to make that up, Bryan, and we have ambitious numbers going forward. So we thought it was prudent to adjust our numbers down modestly. But we like to be as accurate as we can be, and not have any Pollyanna.

But the good news is, those license deals that slipped -- they didn't go away. They are still out there, and you still plan on closing them, right?

That's right. We prefer those companies buy new software before they get acquired or something else along those lines. Obviously, as I tell our sales force all the time, the only thing between a verbal and a signature -- the only things that can happen are bad. So, I do think it's something about pressing on, getting those signatures, and I think that is something we have been working on for the last few quarters. But this quarter was a real challenge for us, and I think we are going to redouble our efforts to close those deals in the second quarter.

Okay. Then the maintenance revenue was just about flat year-over-year. Is that just a fall through from the software license sales in the quarter?

It is. And it's also a direct impact of the low interest-rate environment, where our upticks for the first quarter are normally CPI plus two or three points. And CPI is basically nothing. So we are having very low renewal rate increases.

Okay. And then just finally -- maybe a big picture thing. We had several companies reporting inside of financial technology, and you see a mixed picture for the demand. Some companies are struggling and pulling back spend. Some are spending. Just maybe get your thoughts, if you can go around and talk about the different areas, pockets of strengths and weaknesses for demand?

Well, I think, Bryan, that, at least what I saw today, was that the nation's output is higher than it was three years ago. And we have 5 million less people employed. That is technology in its rawest form. I think that, that's what's happening with the financial institutions -- financial services companies -- fund companies that are doing well. They are reinvesting in their businesses. I think the ones that are struggling a little bit are way more cautious -- are trying to sort out which businesses they are keeping -- which businesses they are selling. And when they are in that environment, it is more difficult for them to sign up for major capital purchases like licenses.

I do think in our software-enabled services businesses that we have as great a pipeline as we've ever had. One of our new salespeople in the Midwest told us that he had 40 active prospects that he is feeling very strong about. That's two or three times as much as we ever hear out of any of our sales people, about how many deals they potentially could close in 2012.

Okay. Great. Thanks for the color.

Terry Tillman, Raymond James.

Bill, first question -- on the license revenue front, I know you talked about some deals that slipped. Could some of the potential license softness and/or the future outlook there continue to be more structural in nature, whereby it's just another kind of reflection of more things moving to an outsourcing model? So maybe the idea of $5 million or $6 million a quarter -- maybe that's not really the case going forward because there's just more of the ship, which I would assume benefits the software-enabled service business in the future?

I think that's right, Terry, but I don't think $5 million or $6 million is a stretch. We are better than a $3.8 million quarter, and I can give you color. And we did have a number of deals that fell out, but we can execute better than $3.8 million. And I think we are changing. We don't sit still, and I think you will start to see momentum come in.

The PORTIA acquisition is really a $170 million acquisition. The biggest dollar amount we ever spent before was Financial Models at $159 million. And then we are spending $800 million or $900 million for GlobeOp. So to tell you we didn't spend any time on those two deals is not true.

There comes a time when the basket is completely full, but that's not even an excuse for $3.8 million. That does not cut it even with those kinds of things going on. I think you will see an improvement in Q2.

Okay. I guess, though, Bill, in terms of looking at the biggest portion of your software-enabled services business, the hedge fund -- just the core hedge fund administration business -- either on the first quarter recap or the outlook -- any change at all there in terms of sales cycles, closed rates, or that initial basis point that you are getting in terms of services? Any change there?

Not really, Terry. It has been very strong. We think it's going to continue to be strong. We are obviously investing in this business. It's very apparent to the marketplace that we are investing in that business.

As I said, our Form PF is a solution. You can use it. You can test it. You can put transactions through it. You can see where the numbers hit on the form. You get to see it real time. Everybody else is showing up with a PowerPoint. We invested, we hired some people -- really strong people that have built this for us. We are excited about what we built. We are excited about what our opportunities are, and we've won a lot of great business in Q1, as Norm went through. And we have already won a lot of good business in Q2.

Okay. Maybe, Patrick -- just a quick financial follow-up. I didn't think I heard it earlier -- the organic revenue growth for just the software-enabled services business in the first quarter. And, just as we are doing our models on operating margins on a non-GAAP basis, what should we be thinking about for the year versus prior year on a percentage -- a margin percentage basis?

On the software-enabled services, it grew in total about 12% and 9.3% organically. The fund administration business within the software-enabled businesses grew about -- a little under 18% organically in the Q1. I'm sorry -- Terry, what was your second question?

I'm hogging the time here, so I'm just going to hurry up and then shut up. In terms of the full year non-GAAP operating income, what is the right assumption in terms of the margin this year versus last year? How much is it expanding, is what I was trying to get at.

We think that the adjusted operating income should expand by about 300 to 500 basis points.

Tim Willi, Wells Fargo.

I have two or three questions here, if I could. The first was -- in the software-enabled services, could you give us any sort of color or just comment on deal size or any trends around number of products being purchased now, versus maybe where we were a year ago? I'm curious around how clients are thinking about trying to leverage that type of model to get more functionality, as opposed to what they might've gotten under constrained budget for the license-type approach?

Tim, I think when you think about our fund services, our software-enabled services businesses, there has been a trend toward really bigger deals. So for us to do a $1 million fund services deal, which is about $80,000 or $85,000 a month, I think that what they generally get is an accounting solution, so that you get an NAV, or you get your portfolio if you're a long-only manager but not a mutual fund or hedge fund. You get that, and then you get reconciliation, and you get an entire reporting package that comes down.

Some of our clients are opting for performance measurement and performance attribution. And that would be another uptick for us, probably in the $7,000, $8,000 to $10,000 a month range. And then we have other things that we would offer in that package. And a lot of our clients are taking it -- like our fixed network and post trade communications network, our data. And that would generate another, somewhere between $10,000 and $20,000 a month. So a better-sized client that is doing $1.5 million with us is spending $125,000 a month and getting that collection of services.

Is there a way to think about that experience this year versus a year or year and a half ago, if you think about new sales and what the monthly revenue is? Is that sort of the average contract value for a new customer -- is it up10%, 5%? Trying to get a feel for how that is trending in addition to just the new client logos you are signing?

I think that is a great question, and I would say a couple of things that have been really driving that. A couple years ago you had Madoff, and that really drove everybody to outside administrators.

What that also drove was, an awful lot of the fund managers to recognize that monthly NAVs really wasn't cutting it with their investor group. Their investors were demanding daily NAVs. So what happened was -- obviously that's a big uptick in revenue for us, but we have to cut 20 or 22 NAVs a month rather than cutting one. So, it's additional work for us. But I think a couple of our clients went from $20,000 a month to $200,000 a month. So I would say that our average deal size has gone up about 20%-25% in the last 18 or 24 months.

That's very helpful. Thank you.

The second question I had was -- thinking about the upcoming integration of PORTIA and GlobeOp. Obviously, two of the biggest deals you have done, and their success, I would argue, obviously, very important to SS&C and its share price, et cetera. Could you talk about anything you are doing in terms of management structure and integration process to ensure that the core business is not being distracted or at risk of -- you've got so many eyes coming off the ball in terms of your senior managers or your head salespeople as you try to integrate these two acquisitions. Just how you guys are thinking about approaching it to minimize any kind of disruption like that?

Sure. The first thing is that we did tremendous due diligence prior to buying either of these companies. We both spent days in Mumbai, which is a big processing center for GlobeOp. We spent days in New York and in London going through their operations. We spent days with the PORTIA people in Boston, really getting to understand these companies and their customers. We have literally talked to tens of customers in both companies -- not only customers that are joint customers of ours, but also a lot of outgoing calls from us to their customers. And we have also been fielding a bunch of incoming calls.

So we have done a tremendous amount of customer listening. We listened to the customers, and, basically, what we have told the customers is that the first changes that the customers will see will be very positive for them. We will listen to them. We will understand what they want, and whether that's portals or mobility or tax or fund to funds or private equity or better reporting tools -- that's what we are going to show them. There's not going to be changes in their underlying technology. There's not going to be changes in their client support teams. There's not going to be any change in their coverage.

As far as the sales force is concerned, since they get paid on commission, it's amazing how focused they are. All they did was get more arrows in their quiver. They get to go through a few education routines with the senior people at PORTIA and the senior people at GlobeOp. Then they are off and running. And I think that's why our pipelines are building, and that's why we have optimism. It's not Pollyanna, right? We are a bunch of accountants, really. We're looking at numbers. I think the numbers are going to play out that SS&C has a very strong franchise, and it's going to play out over the next several quarters.

Great. That's all I have. Thanks.

(Operator Instructions)

Ross MacMillan, Jefferies.

Bill, could you just simplistically give us the framework here vis-a-vis your own front-ended fund admin business today? And then, what PORTIA brings incrementally, and then what GlobeOp brings incrementally as well? So if you could just describe the three different businesses that you are going to be bringing together, that would be great.

SS&C's fund services business is really made up of three distinct parts of the business. One is the hedge fund administration business, where we manage about $128 billion in hedge fund assets -- probably across 2500 or so funds. We have a $60 billion private equity business that we manage across probably 1000 funds. And then we have a fund to funds business with about $40 billion in assets under administration -- probably around several hundred -- 500 funds.

So we have about 4000 funds -- $228 billion in AUA. It's about $120 million business -- $115 million-$120 million business in 2011. We also have a license and services business into that business, so it's another $15 million or so.

The PORTIA business -- they have 195 clients. They have about $10 trillion in assets under administration -- actually in assets on PORTIA. Primarily, they are a license -- a perpetual license business. They've just started an ASP business which represents about 9% of their revenue. Their 195 clients are spread across North America, Europe, and they have a strong presence in Asia with offices in Bangkok, Hong Kong, Tokyo, and Bangalore. So we are excited about that penetration for us in the Far East. We also get those 195 clients in order to cross-sell and up-sell, and they are very large fund managers. So we will have opportunities to sell them fund administration services for their hedge fund assets and private equity assets.

We also then would bring in GlobeOp, which has 1775 funds -- about $187 billion in AUA as of the end of the first quarter. They basically have very strong middle- and back-office services that very much complement our private equity and fund to fund; and then our tax processing business. They have a lot of great technologies, with their GO LTC product and their GO check product that we're excited about spreading across our fund services business. And I also believe that our ability to do very complex funds, like credit and distressed and [R-type] funds are going to be things that really put us apart from the other large fund administrators.

We will be the only publicly traded non-bank fund administrator in the top 10. So I think it's really important that we go out and market these capabilities and let people know what we have to offer.

That's really helpful. Maybe just a follow-up -- can you explain why PORTIA's AUA or AUM seems so high compared to both GlobeOp and SS&C today. Can you explain to me why that is? And then secondarily, on PORTIA -- from a business model perspective it sounds like its more of a license maintenance model. How are you thinking about that, assuming it closes? When it exists within SS&C, are you going to make any changes to the go-to-market or the contracting so that it looks more like your software-enabled services business?

Sure, Ross.

I think that the AUA on PORTIA, right -- remember, when you talk about assets under administration for GlobeOp and for our fund services business, we are doing the accounting. When you talk about the AUA for PORTIA -- its license business --and clients of theirs include places like Invesco and Mitsubishi and [Zuhu] and very large long-only managers. We have similar businesses in our Pacer business, and also in our CAMRA business. Our CAMRA business has about $2 trillion in assets on it. So that is similar to PORTIA.

Our go-to-market strategy with PORTIA will be to really offer our clients what our clients want, which has been SS&C's tradition for a long time. Perpetual license, term license, ASP, ASP Plus, our BPO services. And, again, I think that capability is going to be very well received by the PORTIA clients, in particular on different asset classes like hedge funds or private equity or fund to funds; and then also in certain derivative categories, where we have a very superior offering that we think would be very attractive to the PORTIA client base.

You've obviously said that PORTIA will be accretive in 2012. Should we look for an update for the full year guidance once that deal closes?

I believe we should. We hope to close that in the next week or so -- hopefully, sooner. And then I think we will come out with some guidance on that. It will depend on what it looks like on the close for GlobeOp. We might only add one, but we should have some updates.

And we're really excited about where we're going -- what we are going to do. Ad I think it's something where, as we've always said, we think management matters. When we do acquisitions, our organic revenue growth is going to have some challenges to it, because the senior Management team is making sure these acquisitions get done and get done correctly and gives it gives us growth with our margins. That takes work. That is something we do and we do well. And I think, pro forma for 2011, we have already come out and said that, with PORTIA and GlobeOp we'd have $635 million in revenue and $265 million or so in consolidated EBITDA.

Great. Thanks, Bill.

I currently show no other questions. I'll turn it back to Management.

Again, we really appreciate everybody being on. We are very optimistic about our business, and we look forward to talking to you next quarter. Thank you.

Ladies and gentlemen, thank you for participating in today's program. This concludes the program. You may all disconnect.