After conducting a forensic review of Enfusion, a technology provider for the investment management industry, Spruce Point believes that financial restatement risk is high and that the company is likely to disappoint investor expectations. Based on our investigation, we estimate a 40% to 60% downside risk.
The report highlights several key concerns with the Company, including:
- Enfusion claims to be a high-growth SaaS provider of financial software with multi-year contracts, but we don't believe it to be a high quality one
- The company has experienced significant executive turnover including the CEO, CFO, Chief Revenue Officer (CRO), and Chief Strategy Officer (CSO) roles
- Industry consolidation and weak new fund launches will likely make customer growth difficult
- We believe revenue is at high risk of misstatement as we find accounts that appear to have been quietly revised or do not reconcile