Clearstream and UBS agree on long-term partnership in funds environment
- Clearstream to acquire majority stake in UBS’s fund distribution platform Fondcenter AG
- UBS to remain shareholder in the future business combination
- Combination of Fondcenter with Clearstream’s Fund Desk business will create a leading fund servicing provider with significant benefits for UBS and Clearstream clients
Deutsche Börse Group’s post-trade services provider Clearstream and UBS have agreed on a partnership in the investment fund services business segment. The companies have reached a joint agreement by which Clearstream acquires 51% of Zurich-based fund distribution platform Fondcenter AG from UBS for CHF 389 million. UBS will retain a minority of 49%.
The transaction is expected to be completed in the second half of 2020. Subsequent to the transaction, Clearstream will fully consolidate Fondcenter. The newly-combined distribution services will have over USD 230 billion in Assets under Administration (AuA). As part of the transaction, UBS and Clearstream will enter into long-term commercial cooperation arrangements for the provision of services to UBS.
Theodor Weimer, CEO of Deutsche Börse AG, said: “This acquisition of the majority stake in Fondcenter and the associated long-term partnership with UBS is a testimony for the trustful client relationship. And it is a further important and strategically significant step for Deutsche Börse in implementing our Roadmap 2020.”
Stephan Leithner, Member of the Executive Board of Deutsche Börse AG and Chairman of Clearstream, added: “Our leading position in the fund servicing area will be critically strengthened by Fondcenter and the UBS partnership. It complements our product offering in the investment funds distribution space. Our distributor customers will benefit from extended global fund provider coverage, while asset manager clients will have direct access to UBS GWM premier distribution network as well as access to Clearstream distribution reach. We expect to generate significant synergies from combining our fund distribution businesses.”
Sergio P. Ermotti, CEO UBS Group AG, said: “We are delighted to reach this agreement with Clearstream, building on the successful relationship we have had with them and Deutsche Börse Group for many years. Through this transaction, and our long-term cooperation arrangements, we can achieve greater scale and breadth of offering for our clients and create significant value for our shareholders.”
The newly-combined company will become the centre of excellence for fund distribution services within Deutsche Börse Group and will significantly enhance Clearstream’s existing Fund Desk business (formerly Swisscanto Funds Centre). Fondcenter AG anticipates growing its revenues by double-digit rates over the next years with additional meaningful revenue synergies from cross-selling into the Clearstream client base.
This acquisition successfully marks an important step for Clearstream in growing the B2B fund services as highlighted in the Deutsche Börse Group’s “Roadmap 2020” strategy for growth. Over the past two years, Clearstream has already grown its service portfolio in the area through the acquisition of Swisscanto Funds Centre Ltd and the subsequent creation of Clearstream Fund Desk, and it has broadened its international network by acquiring Ausmaq, a Sydney-based custodian of funds.
Bär & Karrer and Ardea Partners have advised Deutsche Börse Group in this transaction.
As an international central securities depository (ICSD), headquartered in Luxembourg, Clearstream, which is part of Deutsche Börse Group, provides the post-trade infrastructure for the Eurobond market and services for securities from 58 domestic markets worldwide. With around 14 trillion Euros in assets under custody, Clearstream is one of the world’s largest settlement and custody firms for domestic and international securities.
Clearstream delivers investment fund solutions built on asset safety and distribution efficiency. The Vestima one-stop shop for funds acts as single point of entry for orders, streamlined cash management and consolidated position reporting in a secure environment. Clearstream offers customers direct access to local domiciled funds in 48 fund jurisdictions worldwide, of which 30 are in Europe. The Fund Desk offering complements Vestima to include distribution support services and to provide direct access to a fund research solution.
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