[ U P D AT E ]
Mergers and
acquisitions
dominate PEFA
headlines
IT’S NOT JUST HEDGE FUND
ADMINISTRATORS FACING
CONSOLIDATION, THERE HAS
BEEN PLENTY OF MOVEMENT
ON THE PRIVATE EQUITY SIDE
AS WELL DURING THE HALF OF
THE YEAR.
T
he first half of the year in the fund ad-
ministration world was once again dom-
inated by mergers and acquisitions (M&A).
However, while this was commonplace on
the hedge fund side, private equity adminis-
tration has now fallen into the trend.
Some of the most notable deals included
Apex Fund Services’ acquisition of private
equity administrator Ipes, and SSG Group’s
purchase of Augentius.
The takeover of Ipes, which will add $160
billion to Apex’s assets under administra-
tion, follows its recent takeover of Deutsche
Bank’s alternative fund services business,
which also services private equity funds.
The purchase of Ipes will take Apex into
the ranks as fifth largest administrator by
assets.
Meanwhile Ultimus Fund Solutions agreed
to buy Woodfield Fund Administration, a
privately-owned private equity adminis-
trator, and Centaur Fund Services said it
will build its private equity and real estate
service following the acquisition of Luxem-
bourg Capital Partners.
Outside of the M&A scene, Northern Trust
announced it will merge its hedge fund and
private equity administration businesses
to form a single North America Alternative
Fund Services unit.
The launch of the unit will hope to
capitalise on the growing trend of hedge
fund managers incorporating private equity
and other alternative strategies into their
portfolio.
“Bringing private equity and hedge fund
services together leverages Northern
Trust’s strong footprint in both sectors and
enables us to deliver increasingly innovative
solutions for this dynamic market,” said
Northern Trust’s head of Alternative Fund
Services Peter Sanchez at the time of the
announcement.
The growth in M&A between adminis-
trators reflects the growing importance of
the asset class. Private equity assets under
administration increased 18% to $2.5 trillion
in 2017. For administrators to grow in-line
with the asset class, more will turn to merg-
er small and mid-sized privately-owned
administrators to capitalise in the surge of
outsourcing.
The technological capabilities of some of
the biggest players through acquisitions
means they are able to offer solutions that
reduce costs, forcing more pressure on
smaller, independent providers.
“The best of the upstart fund administra-
tors are aggressively tackling these chal-
lenges and growing quickly because of their
efforts, while the largest fund administra-
tors are realising that they are better off
buying what they need to better compete,”
added Andraca. “Just like what has hap-
pened with many FinTech companies, fund
administrators seem to be more aware that
they need a ‘buy or be bought’ strategy.”
Private Equity Issue 2018
globalcustodian.com
11