Good day, ladies and gentlemen, and welcome to the SS&C Technologies Third Quarter 2015 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this conference is being recorded.

I would like to introduce your host for today's conference, Ms. Justine Stone. Ma'am, please begin..

Hi, everyone. Thank you for joining our Q3 2015 earnings call. I'm Justine Stone, Investor Relations for SS&C.

With me today is Bill Stone, Chairman and Chief Executive Officer; Norm Boulanger, President and Chief Operating Officer; Rahul Kanwar, Senior Vice President and Managing Director of Alternative Assets; and Patrick Pedonti, Chief Financial Officer. Before we get started, we need to review the Safe Harbor statement.

Please note that various remarks we make today about future expectations, plans and prospects including the financial outlook we provide constitute forward-looking statements for purposes of 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, including those discussed in the Risk Factors section of our most recent Annual Report on Form 10-K, which is on file with the SEC and can also be accessed on our website.

These forward-looking statements represent our expectations only as of today, November 2, 2015. While the company may elect to update these forward-looking statements, it specifically disclaims any obligation to do so. During today's call, we will be referring to certain non-GAAP financial measures.

A reconciliation of these non-GAAP financial measures to comparable GAAP financial measures is included in today's earnings release, which is located in the Investor Relations section of our website at www.ssctech.com. I will now turn the call over to Bill..

Thanks, Justine. SS&C had a very exciting third quarter. We closed on our acquisition of Advent Software in early July and announced our intention to acquire Citi Alternative Fund Services August the 18th. We acquired Varden Technologies on September the 2nd and announced our intention to acquire Primatics Financial on September 14.

SS&C grew our top line by over 60% to $311 million and adjusted net income by over 28%. Our EBITDA margin for Q3 came in at 42%. This performance is a testament to SS&C's superior solutions and the technologists we employ (02:46) that are constantly innovating and our relentless focus on sales and marketing to win new clients.

We also have very capable managers that deliver first-class service to our customers every day. We've made tremendous strides with the integration of HiPortfolio and Anova and are tracking ahead on the Advent cost synergies. We are beginning to see positive momentum in our revenue on the Advent cross-sale efforts. With that, I'll turn it over to Norm..

Thanks, Bill. SS&C's third quarter is marked by our acquisition activity close on Advent and announced three additional acquisitions, but also by our strong results and ability to maintain and improve throughout our business. As of September 30, SS&C has owned DST Global Solutions business for 10 months.

During this timeframe, SS&C, HiPortfolio and Anova had achieved numerous milestones, including $13.1 million of run rate cost synergies, expanded services for nearly 20 customers and solution integration.

HiPort and Anova has been integrated with SS&C's world-class solutions for performance and attribution, hosting and outsourcing and client communications and reporting. Globally, customers have benefited from the seamless integration of solutions.

We've also achieved some of our goals in relation to our acquisition of Advent Software, which closed July 8. We are tracking ahead of plan on the $45 million three-year synergy target with $30 million in run rate synergies implemented as of September 30. We have also initiated a formal cross-sale program that is gaining traction.

The leadership changes and reorganization will allow us to offer the highest level of service and support for all of our clients and even better position to succeed.

Pete Hess, who has served as Advent's President and CEO, will lead SS&C's Advent business unit as Senior Vice President and General Manager, and will oversee the establishment of two distinct market-facing teams; SS&C-Advent Advisory Market Group and SS&C-Advent Asset Management and Alternative Markets Group.

We're excited to usher Advent into a new phase of growth and innovation and to deliver the expanded benefits that we can now bring to our clients as a combined force. Now, I'd like to review some of the key deals for Q3.

We won business from four Australian clients to develop a franking's credit module for HiPortfolio, which is an Australian tax imputation applied to dividend. Our current Money Market Manager client is enhancing their global platform to support automation of cash-credit transactions for U.S. and EMEA operations that are currently handled manually.

A mid-sized Northeastern bank joins our ASP fixed income and derivatives parts to manage its trading and derivatives portfolio. SS&C's offerings scored the highest on feature function and support as compared to any other provider that bid on the business. We believe there are many more banks we can deliver this solution to.

A financial management firm chose to host and have integrated data management for SS&C-Advent APX Moxy solution. We're seeing more opportunities while utilizing Advent's on-demand services from prospects that currently use our competitor solutions.

An $11 billion asset manager, who is an existing Advent APX client, purchased SS&C's reconciliation tool, and finally a Caribbean investment and wealth manager, a longstanding PORTIA client, converted to our full BPO of services. I will now turn it over to Rahul to discuss the Alternatives business..

Thanks, Norm. SS&C's Alternatives business had a 7% increase in revenue for Q3 2015 compared to Q3 2014. We continue to see sales trends and competitive takeaways, as well as winning new launch mandates. Our newly formed private capital group signed its first customer and is gaining momentum in building a pipeline.

In August, SS&C announced our agreement to acquire Citi's Alternative Fund Services business for $425 million subject to certain adjustments. We expect that this acquisition will position SS&C as the second largest fund administrator in the world.

Citi Alternative Investor Services includes a team of 1,700 professionals across the globe, including offices in New York, New York; Jersey City, New Jersey; Columbus, Ohio; Dublin and Gurgaon, India. We're excited to close this deal in early 2016 and look forward to having them join SS&C.

Key deals for the second (sic) [third] quarter include the following; a global investment bank selected SS&C for fund administration for its high volume trading hedge fund.

Trade capture, processing and trade compression capabilities was an important selling point, and we believe our trade processing and compression capabilities will be useful in winning other high volume trading mandates in the future.

A $4 billion credit fund converted from a competitor to SS&C's Fund Services platform because we could better handle their complex structure. A global asset manager converted to SS&C's Fund Services platform from a competitor for our superior middle and back-office capabilities.

A $300 million start-up fund chose SS&C for our expertise in credit and complex structures, in particular, as it relates to profit and loss allocation capabilities. As fund structures continue to get more complex, our ability to automate allocations and fee calculations is increasingly advantageous in conversations with prospects.

A Singapore-based real estate investment firm chose SS&C's Private Equity Fund Services and Treasury Services. We were chosen for our expertise in complex structures in the firm's asset classes, specifically around real estate. The fund is well known in the region and we hope to build on this win.

I will turn it over to Patrick to take you through the financials..

Thanks, Rahul. Results for the third quarter were a GAAP revenue of $280.9 million, a GAAP net loss of $34.6 million and a diluted loss per share of $0.36. Adjusted revenue was $311.4 million and included – excluded the adjustment for acquired deferred revenue in the Advent and HPA acquisition.

We closed the Advent acquisition on July 8, but we determined that the first seven days of July were not significant to our results. So we used a simplified method and started Advent results in our financials at the beginning of the quarter. Adjusted revenue increased $118.8 million or 61.7% in Q3.

Advent contributed $101.8 million of adjusted revenue in the quarter. In our HPA business, the DST acquisition contributed $15.2 million. We also had negative impact from foreign exchange currencies of $3.7 million or 1.9% in the quarter. Adjusted operating income was $125.3 million. It increased $46.7 million or 59% from the third quarter of 2014.

Operating margins decreased to 40.2% from 40.8% in Q3 of 2014. Margins were impacted by expenses growing faster than revenues in certain businesses as we made investments for the future. The acquisitions had strong performance in the quarter, as both Advent and the HPA business had operating margins of over 41%.

Synergies of both acquisition are progressing ahead of plan. Advent had cost synergies of $6.6 million in the quarter and a $30 million run rate is expected as of January 2016. Adjusted consolidated EBITDA was $130.8 million or 42% of revenue.

Net interest for the quarter was $32.6 million, and includes $2.6 million of non-cash amortized financing cost and OID. Interest expense increased due to the $3 million credit facility and notes we put in place to acquire Advent. We recorded a GAAP tax benefit in the quarter of $6.5 million or 16% of pre-tax loss.

The tax benefit was impacted by certain acquisition costs that are non-deductible for tax purposes. Adjusted net income was $68.6 million and adjusted EPS was $0.68.

Adjusted net income excludes $43.3 million of amortization of intangible assets, $23.1 million of stock-based compensation, $30.4 million loss on the extinguishment of debt, $13.5 million of acquisition deal costs, $2.6 million of non-cash debt issuance costs and $2.9 million of severance pay related to the Advent acquisition.

$27.3 million of principal accounting adjustments, which includes the revenue adjustment, and $6.0 million gain we excluded mostly related to FX translation of certain balance sheet items, and we used an effective tax rate of 28% for adjusted income.

On the balance sheet, as of September 30, we had $503.8 million in cash and $2.9 billion of gross debt for a net debt of $2.396 billion. Operating cash flow for the nine months was $120.6 million, a $43.7 million decrease from 2014, but we had approximately $66.4 million of Advent and financing transaction costs that impacted the Q3 cash flow.

Highlights for the nine months and the quarter on cash flow, we paid down $180 million of debt since the Advent acquisition on July 8. We've used $12.8 million for capital expenditures and capitalized software for the nine months. For the nine months, we paid $35.9 million in cash taxes compared to $27.8 million in 2014.

Our accounts receivable DSO was 45 days as of September, in financing acquisition, proceeds from option exercises of $10.6 million and we had a tax benefit related to those option exercise of $11.1 million, and then we had a $12.1 million dividend in Q3 for a year-to-date total of $33.2 million.

Our LTM EDITDA, which we use for covenant compliance, includes acquisitions as if they're owned for the full period and implemented cost savings was $429.3 million as of September. It includes $10.6 million of acquired EBITDA and cost savings related to DST acquisition and a $130.6 million related to the (13:49).

And based on net debt of approximately $2.4 billion, our total leverage ratio was 4.5 times. On the outlook for Q4, our current expectation for the fourth quarter of 2015 is revenue in the range of $312 million to $320 million, adjusted net income of $68.4 million to $72.2 million, and diluted shares in the range of 101.9 million to 102.4 million.

We've assumed that we will achieve about $7 million of synergies in the fourth quarter with the Advent acquisition, and our total adjusted operating margins for the total company will be approximately 40.3% to 40.6% in the fourth quarter.

And for the full year, we expect cash from operating activities to be in the range of $210 million to $220 million, and, again, that includes the $66 million of deal and financing costs that negatively impact cash flow, and capital expenditures in the range of 2% to 2.4% of revenues for the full year.

And I'll turn it over to Bill for final comments..

Thanks, Patrick. Our results are indicative of SS&C's leverageable business model and the deep industry expertise we possess. Management is concentrating on the integration of our recent acquisitions to ensure a seamless client experience. As many of you are aware, we are hosting an Analyst Day this coming Wednesday, November 4, in New York City.

That day, we will also be ringing the opening bell for NASDAQ. We are excited to give you a deeper look into our business, the presentations by senior management. We will also be having a webcast available for those of you who cannot attend. Any of you that need any additional information, please contact Justine. And now, we'll open it up for questions.

Mitch?.

Thank you, sir. Our first question is from Ashish Sabadra of Deutsche Bank. Your line is open, sir..

Yes, congrats on the solid results. The margin definitely came way ahead of what you were expecting. And Patrick, you talked about the synergies, cost synergies running ahead $30 million for the quarter. Just so that when you look at it, what do you think about the cost synergies now? You had given the original guidance of $45 million.

What do you think is realistically achievable given the solid progress that you've made so far?.

Yeah. Ashish, I will take it for a second and then Patrick can add and Norm perhaps. We have a really talented team in Advent and we are kind of focusing on how we operate the business, kind of dovetailing a lot of the strengths that they have. I think that we are increasingly confident on the $45 million.

But I wouldn't say that we've yet decided to move that number up. I do think that our confidence level is very high and that we've done some things more quickly, and Pete's done a good job.

The two businesses that Norm spoke about, both the Advisory and the Institutional and Alternatives business are run by very talented guys in David Welling and Rob Roley.

So we have high expectations for them, and I think that Jim Cox has done a good job on keeping control of the expenses and really given us heads up in areas where we can continue to find synergies and really try to improve the business. We're not afraid to spend the money either as we're trying to accelerate revenues.

Patrick, I don't know if you have anything to add..

Yeah, I think that – I mean, I think that was a pretty good summary. I think we got a ways to go to get the $45 million, I think we're doing really well. We're probably, at this point, with a $30 million run rate on January 1, we're probably running about six months ahead of where we had planned.

So I think we're doing pretty good and we're confident of achieving all the synergies..

No, that's great – that sounds great.

Just on the revenue synergy side, can you just give us some more color about around wrapping more services around the software license model, how that's coming along, and also if you can comment on the pipeline for Advent in particular or in general?.

I'll take that, Bill..

Sure. Yeah..

Yeah, I guess couple of things is in relation to the synergies we talked about earlier, see we move pretty fast. And one of the reasons we wanted to do that is we want to focus on revenue synergies. So we have a formal cross-sale program in place.

It's important that this year we get to (18:56) reach out to as many prospects as we can to start getting a comfort level for which of our products and services we will have an appetite for, and we're already seeing some things like our Regulatory Services, Syncova which is an Advent product and service are reconciliation to us.

We're already seeing some traction there, and that's what we're going to continue to focus on and rollout more formal marketing campaigns going forward, but that's really what we're trying to do is drive the growth.

There will be opportunities over the course of the next 18 months as we see what makes sense to capture some more cost synergies, but the real focus right now is going to be on driving revenue growth..

And I would say, Norm, there has been several things that we've done together that has already begun to bear fruit where we have been able to add our hosting and data center capabilities, our ASP and ASP Plus capabilities.

And also, as Norm said, the Syncova Collateral Optimization, it was a big help and a big win we had recently, and we have other parts of the Advent offering that is being cross sold as we speak.

I think one thing to remember is, we expected to close Advent in late April or early May, and we ended up closing on July the 8th which puts us back a couple of months, but we're revving up the machine and we're pretty optimistic..

No, that's great. That's great, Bill.

And just maybe quickly on Citi, any update on the timing on that acquisition?.

Yeah, we expect it to be done in the first quarter of 2016, and we would hope it would be early in the first quarter..

That's great. Thanks again, and congrats on the quarter..

Thank you. Our next question is from Brad Zelnick of Jefferies. Your line is open..

Hi, this is AJ Ljubich on for Brad.

Just wondering, for the full year revenue guidance, it has been brought down a little bit, can you talk about some of the factors that caused this? And are you considering any revenue from Primatics factored into that full year revenue guidance?.

Yeah, right now we don't have any Primatics revenue in our guidance, although we do expect that to close this quarter. And then, I think that – again, as I just said, we closed Advent 60 days later than we expected. Some of the revenue synergies that we expected to get, we have been hampered by a little bit by closing 60 days later.

And secondly, I don't think September was a very good month for the market. So that kind of tempers where we are at and we also have not had any luck at all with FX, so we've had headwinds on FX the whole year. So I still think that we're very optimistic on driving a lot of revenue and obviously we're driving a lot of earnings..

Great, thanks. And just one quick follow up.

As you think about your sort of general organic growth targets of 5% to 10%, how do you think the prospects are for that going forward and what do you expect to sort of drive you potentially to the higher end of that range?.

Well, I think, again, it comes down to attitude, right? I mean, I think that our people are getting used to each other and understanding that we're aggressive.

And so we go after and win and we've been having a lot of luck lately on takeaways and there is a lot of stuff that we've signed that hasn't showed up at all in the financial statements, as almost everything we sell now is term-based and so we get it a month at a time.

So we're pretty excited about what our pipelines look like and we believe we have some really talented sales managers with really talented sales force, whether that's Eamonn Greaves or it's Marc Flamini or it's Jack Quinn and a number of others, Mark Bramley, Ian Crompton, we have high expectations.

And I believe, as we start knocking the ball around a little bit that we're going to see a lot of synergies come in and a lot of things that we can sell that we never even dreamed our clients needed this far..

Great, thank you..

Thank you. Our next question is from Peter Heckmann of Avondale. Your line is open, sir..

Good afternoon, everyone. I wanted to follow up on trends that you saw in the Alternative space in the quarter.

Can you talk about any noticeable changes in net flows given some of the volatility either by sector or by geography, anything worth calling out there? And when you think about the total AuA, how much should we expect to really track with the broader market as well as with – how does Citi – how does the pending out of Citi change some of the composition of the AuA, and is there anything to call out there in terms of how we should be thinking about that?.

Sure. So, this is Rahul. If you think in terms of AuA in the quarter, we actually saw it go down $9 billion from $668 billion, actually we saw it go down $11 billion from $668 billion to $657 billion, you think that's kind of about what we would expect to see in terms of cyclical.

That's obviously the net of new client additions, performance as well as fund flows. You think in terms of factors, the hedge funds obviously got impacted – the majority of that. I think we're continuing to see lift in private equity and those assets obviously don't fluctuate quarter-to-quarter.

Citi's composition in the hedge fund client base looks very much like ours, but Citi does have a pretty big private equity business that will add a bunch of the assets. So, if anything, post Citi, we expect to have as a percentage of our total, a greater percentage of private equity assets than before..

Okay. Okay.

And then in terms of thinking about those Advent synergies, if we're looking at $6 million in the third quarter and $7 million in the fourth, what's the delta that's get us to that $30 million run rate? Were there some additional synergies that I wasn't aware of, or is there something that's occurring at that time?.

Yeah, there are additional synergies that we've implemented that aren't in place until January 1..

January 1st, okay. Great, I'll get back....

Yeah. So, today, we're running at about a $25 million run rate if you look at what benefit we got on the P&L. And then, in the fourth quarter, we'll be running at a $28 million annual run rate, $7 million times four. And on January 1st, we should be running at a $30 million run rate..

Okay, that makes sense sure (26:03)..

Yeah..

Thank you. Our next question is from Rayna Kumar from Evercore ISI. Your line is open..

Good evening.

Could you call out organic growth rate and any FX headwinds for the quarter?.

Yeah, the FX was $3.7 million on the revenue line item..

And the organic growth rate?.

A little bit under 3%..

Could you discuss your timeline to bring margins from the Citi acquisition up to your consolidated margins?.

Yeah. So, I think it will probably take us a couple of years, probably two years to three years to get them up to our current EBITDA margins. And we expect to see margin improvement from Citi starting in 2016, and it will probably be pretty phased.

We'll probably get one bump early as we make some changes in the integration process, and then we expect to have steady improvement until we get up to our margins..

Got it. That's very helpful. And just one last question. It looks like you saw a slowdown in organic revenue growth. What were the drivers to that and how are you going to bring it back up to your 5% to 10% target? Thank you..

Yeah. Again, on the organic revenue growth, I mean, obviously, we were working hard and trying to close Advent in, like I said, May, and we didn't get to close them until July 8. And then I think some of the things that we've done just as a business, we're adding additional business all the time.

And I think that getting away from perpetual licenses has put a little bit of a short-term, little slower on our organic revenue growth than we would have liked as perpetual licenses are becoming more and more difficult to close, particularly large ones.

Right? More and more of our clients want to buy by the drink which really lends itself to a term license revenue model. Already we're about 91% recurring revenue basis. So I think as we ramp up additional products and services cross-selling into the Advent client base and then continuing to perform on the high portfolio.

And then try to drive our institutional business back into the 5%, 6% range, I think is where our real challenge is, because obviously from our alternatives, which is our biggest business grew at about 7% in the third quarter.

So I think those were our challenges are, and we're doing a number of things to drive some revenue growth in the license businesses that we run around the world..

Thank you..

Thanks. Our next question is from Christ Shutler of William Blair. Your line is open sir..

Hi. This is actually Andrew Nicholas filling in for Chris. I believe at a recent conference, Bill, you commented that you see an opportunity in the next couple of years to consolidate the back end of your portfolio accounting systems. Just wondering, if you could provide some additional detail on what products you're talking about there.

How developed that plan is and possibly the eventual cost savings that you see from doing that?.

Yeah. I don't think that we're at all concerned about the advantage we get out of cost savings. We don't think it's going to be very much.

The only reasons that we would move to collapsing any of our service offerings is because we think we have a service level commitment with a different product that would satisfy our clients more than what they're being satisfied now. We're very driven by what our client preferences are.

So while last year, I think, our biggest win was a San Francisco-based fund of funds that it's on our total return product. Also the new private capital business that we have is also running on our total return product that we just signed one of the largest family offices in the country. So we're excited about that we have this capability.

I think Norm talked a little bit before about how we're doing a franking model with four large Australian clients. That's all built around the high portfolio database and intelligence that's built in there.

And so, we think Geneva is a really harsh for us that we think that there's opportunities for us to build that out and be able to corporate a lot of functionality. It already has wonderful technical underpinnings.

But you don't just bring in Australian capital gains or Australian franking or Swiss GAAP or Bill S-3 accounting in Canada or the regulatory requirements of the Fed. There're just a lot of things that you have to look at, and what you don't want to do is upset your clients through the transition period.

So we're not doing that for anything to do with a cost savings initiative. What we're doing it more in order to be able to satisfy our clients' needs and trying to make sure that we're meeting what they want to do over both the short-term and long-term..

Makes sense. Thank you. And then a question for Will (31:38), I believe, can you talk a little bit about the pipeline in fund administration. Looks like you guys had quite a few nice wins in the third quarter.

, I was just wondering how some of those additional sales have progressed, and if there're any prospects that have fallen out of the pipeline? Thank you..

I think as Bill said, we're continuing to see strength particularly in competitive takeaways. I think we're getting to time of the year where folks look at providers for the new year, and there's a pretty healthy pipeline built up as a result of that.

I think the other area that's been particularly strong for us and continues to be strong is our private equity business. We've seen greater outsourcing in the private equity area, and we continue to see some pretty large fund groups speak to us..

Great. Thank you..

Thank you. Our next question is from Hugh Miller of Macquarie. Your line is open. Hugh M. Miller - Macquarie Capital (USA), Inc. Hi. Good afternoon. Just had a question following up on the comment about the PE space, obviously you guys mentioned about having a greater exposure there post the CFS deal.

Where do things stand now for the percentage of admin that is outsourced and is there anything coming down the road that could be an inflection point to kind of see a greater shift towards demand for outsource?.

You think our estimate is probably 15%, maybe 20% of the private equity industry based in terms of AuA outsources now. It tends to be smaller middle market funds. I think a lot of the great big private equity firms that have built big operations are still in the exploratory stages. And those are some of the folks that we're having conversations with.

So we do think that both as a result of the ability to access technology on the scale on which we've invested in it as well as some of our experts are moving those folks closer to outsourcing, but it's a process. Hugh M. Miller - Macquarie Capital (USA), Inc. Okay.

And you guys have talked in the past about kind of Advent and they had, kind of, tossed in professional services for free when they were selling licensing services and kind of it being a bad habit.

Can you just talk about what's been the initial client reaction as you've gone in and may be tried to change that strategy, are clients comfortable with that are you seeing any pushback any color there?.

I'll take that Bill. And again, I think one of the things that professional services it's important to understand about professional services we're adding value to our customers. So I think what's pretty clear is the Advent team in particular has a very strong level of expertise they are worth paying and they are worth getting paid their full rates.

So that's more of a process and a cultural change that the client is not going to notice because each time we sell the business we are selling our value proposition, but we have a team looking at that as a formal process and we have a strategy to improve those margins and we expect that that will happen pretty quickly. Hugh M.

Miller - Macquarie Capital (USA), Inc. Okay. And last question from me, we saw days outstanding, I think, about 45 days.

As we think about 2016 and as you have this CFS franchise tucked in and with Advent as well what should we think about kind of as a targeted days sales outstanding for the combined franchise?.

Well, this is Patrick. The uptick this quarter, I mean, I think we've been running around 42 days or so prior to Advent. The uptick this quarter is pretty much, for the most part, due to Advent.

I think they've got a lot different DSO characteristic than our business because what they're doing is, they're billing annual contract for the time, where we're billing monthly. So the collection process on the Advent it takes a little bit longer. It's not an issue of them having any bad debt exposure because they haven't historically.

But it takes a little longer to collect the large annual license billings. And so, I would expect, we'd probably be around 45 days to 46 days when you combine us with Advent. Hugh M. Miller - Macquarie Capital (USA), Inc. Okay. That's helpful. Thank you very much..

Thank you. Our next question is from Sterling Auty of JPMorgan. Your line is open..

Yeah, thanks.

Bill, you kind of touched upon Primatics in terms of close, but maybe to help investors, can you just summarize both Barden and Primatics, the approximate close dates and what do you think that actually will contribute as it layers in?.

Yeah. Great to hear you, Sterling. We're honored..

Great to be heard..

Yeah. So, Barden we closed in, I think, September 14 or September 18. And that's a great technology we bought up in Boston. I think the ultimate payout will be about $25 million for that business. We're excited about the technology. It should probably generate, $10 million a year in revenue or so, and a few million in EBITDA to start with.

But we think we can leverage it across our client base. And obviously, they haven't had anything like that. The 150 strong sales marketing organization we have that can help market farm. So we're excited about that. We got some really talented people in that group. When we have a big presence in Boston that will really help launch that for us.

Primatics is in Arlington, Virginia or McLean, Virginia. And they have about 350 people. They're very sophisticated in loan analysis and loan information delivery to places like the Fed, the treasury and the SEC. So it's a very critical part of the analysis of loans.

And we're excited to have about 55 clients they generate, this year, we expect them to generate. Fiscal 2015, they will generate $55 million, $56 in revenue. We expect it to tick up next year, and we think that they will be running at 25% to 30% margins in 2016. So they ought to be generating $12 million to $14 million in EBITDA.

So we're excited about both of them. We think loans is a very, very strong asset class. And we think that that's going to continue. The world is searching for yield. And this is one of the only places that they can get it. And we think that we're well positioned, and we think that Primatics will help us in that regard..

That's great. And you mentioned earlier in the prepared remarks or in answer to one of the questions the challenging market in September. And we get that question a lot from investors. So anything you could do to help characterize how investors should look at different moves in the markets, whether it be equity markets, fixed income markets, other.

And how they should think about the impact on your business would be very helpful..

Yeah. Sterling, I think as long as the United States remains in democracy and maybe we have a capitalist as a President, I think we'll be in pretty good shape. I think that the United States has been around for like 240 years or so, and I think that there will be transitory ups and downs.

Will there be another financial crisis like 2008-2009? I kind of doubt it. Right? There hasn't really been another Great Depression even though there have been some periods of very low growth and recessions. And I think that it always lessons learned. Something else will happen.

It will be bad, but it probably won't be as bad as the Great Depression, and it probably won't as bad as the financial crisis. But I think our job as managers and executives is, to stay on top of things and listen to our clients and try to be able to move with them as they're executing their strategic plans as a really valued partner.

You got a lot of view on the calls work for very big places that one of the challenges is that you just get bigger. And then when you guys get smaller, it's very, very difficult for your organizations. And that's why you're seeing such a move towards an outsourced model.

The only way the outsourced model is going to work for us at 10x revenue multiple for us is that we gather expertise, right. So when Rahul talks about 1,700 people from Citi, the productivity that we'll be able to get out of that 1,700 people is enormous.

The 350 people that we get from Primatics, right, those are all people that either they build loan systems, they implement loan systems, they design systems for loans, are they answer questions on loan, are they sell loan system? For me to go out from scratch try to build a workforce of 350 people would take me several years. Same thing with Citi.

I couldn't get 1,700 people in hedge funds and private equity funds, it would take a multitude of years. So you see what we've done with GlobeOps, you've seen what we've done with DST International HiPortfolios and Anova.

We're really confident in our ability to drive earnings, and we're also really confident in our ability to build systems that people want and be able to accelerate our revenue. So I think that's what's going to happen over the next several quarters.

And I just think it's a question of, you go back a couple of years, even back to 2011, right, which is four years ago, SS&C is doing $381 million in revenue. This year, we're going to do $1.50 billion, and next year, we're going to do another few hundred million above that.

So I'm just excited about where we are, what we're doing, the talent that we have and then the dedication and the will that I think the management team here exhibits..

Great. Thank you, Bill. I appreciate that..

Thank you. Our next question is from Chris Donat of Sandler O'Neill. Your line is open..

Hi. Good afternoon. Thanks for taking my question. Bill, just wanted to comment on something you had in your prepared remarks in the press release that the opportunities presenting themselves today are larger and more lucrative than ever.

Are you talking about opportunities like mergers, like you just answered in the last question or is this more new clients or both?.

Yeah, Chris. I really think it's both. Right? I mean, I think as you satisfy these larger and more sophisticated companies, we did a large lift-out of areas a couple of years ago, and it's really been a success.

It's not perfect, there's nothing as ever perfect in this business, it's a detailed business, but when other large organizations sees that they don't have to hire all those people. Right? All of you are in the research, the trading, the portfolio management, AKA what's considered the front office in financial services.

And more and more when people walk around and see how big the IT department is getting or how big the accounting department is getting or the reconciliation department and then, oh my goodness, when we have all those people, we're going to have to have a bigger HR department.

And once we have a bigger HR department, we certainly have to have a bigger legal department. So pretty much what used to be a research trading and portfolio management organization now becomes a very large institution that has to have all kinds of helpers.

Right? And so, I think the outsource model is not going away and if we can gather the resources and expertise, we have a great chance. And lastly, I think on the acquisitions is, I don't think that Citi is going to be the last major bank to decide to get out of this business.

My guess, over the next two years or three years, there will be at least four or five of them that get out of this business. And my guess is that SS&C will nab at least one and probably more than one..

Okay. Awesome. And then, just on one question about the private equity business because there's not a lot of quarter-in, quarter-out volatility in the marks there, but I guess this might be more for Patrick or Rahul. Is there a typically seasonality as you think about bringing on the Citi business.

Do you see private equity marks more typically happen in the fourth quarter or is that not really a seasonal thing?.

This is Rahul. I think that the people make administration decisions pretty evenly during the course of the year.

We've certainly seen pretty even growth in the private equity over the course of the year, maybe a little more bunch towards year-end because there's year-end and the completion of the audit and financial statements at the natural time, but I'd say pretty even..

Okay. Got it. Thanks very much..

Thank you. At this time, I show no other questions in queue. I'd like to turn it back to Mr. Bill Stone for any closing comments..

Once again, we really appreciate people coming and listening to us for our third quarter. I think we had 120 people on the call today, which is the most we've ever had. We continue to execute. That's really what we build our business on.

And I think that you'll see over the next several quarters that that will be sticking to that knitting, and we look forward to talking to you after the first of the year, and I hope everybody has happy holiday season and we will talk to you in probably February. Thanks..

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect. And everyone, have a great day..