Ethos Get CQS Stake
A private equity fund formed to invest in tech companies has taken a stake in financial software developer CQS Technology Holdings.
The $50m Ethos fund is now fully invested, although it is not saying how much money it put into CQS or how large a stake it took. CQS has also gained an empowerment partner, by selling a 25% stake to Kapela Investments, with the black group taking out a bank loan to help fund its buy-in. CQS designs auditing, risk management, financial reporting and performance management software and sells it to auditors, listed companies and state bodies.
The Ethos and Kapela deals should help it develop products, reach new markets and fund potential acquisitions, and their presence should also add operational support to the company.
Ethos partner Stuart McKenzie said Kapela would add important black empowerment ownership credentials to the business and help it to transform further.
“Being empowered is going to open up new markets for it.” Ethos took a significant stake in CQS as it was rare to find a medium-sized company still managed by founders who were willing to accept institutional investors.
Its software served a niche growing steadily as tighter regulations put more emphasis on risk management, McKenzie said. CQS MD Ashley Cohen said Ethos would help identify new opportunities and manage its growth.