HP Takes $30 Million Capco Stake

By @NY Staff

Hewlett-Packard Company and Capco, which provides straight-through-processing technology to the financial services industry, have formed an alliance that includes a $30 million investment from HP.

Under the agreement, HP and Capco plan to develop services to help financial services customers settle trades from three days to within one, as mandated by the Securities and Exchange Commission.

The alliance also plans to provide products and services aimed at market issues such as consolidation and cross-border trading. HP and Capco said they will target customers in capital markets, private client and asset management segments of the financial services industry.

The deal gives HP a chance to increase its market share for IT infrastructure and outsourcing as major Wall Street firms update their post-trade, straight through processing (STP) systems, in an industry where Sun Microsystems and IBM dominate.

Capco said it would provide consulting and customized software for STP, transaction processing, operational risk management, multi-channel distribution, data management, and financial performance management.

With the stake, the Palo Alto, Calif.-based HP becomes Capco's preferred provider of IT infrastructure and services, while Capco gets the same distinction as HP's vendor of process consulting services and software.

Capco, with 800 employees, maintains offices in New York, London, Frankfurt, Paris and Singapore.