Clearstream and UBS to embark on a long term partnership in investment fund services, Deutsche Börse Group announced yesterday. Clearstream is to acquire 51 per cent of Zurich-based fund distribution platform Fondcenter AG for CHF 389 million. UBS will keep the remaining 41 per cent of the shares according to a joint agreement between the two companies.
The transaction is planned to complete in the second half of 2020 and then Clearstream will fully consolidate Fondcenter. It is estimated that the new fund distribution platform will have USD 23 billion in Assets under Administration (AuA). Clearstream and UBS will remain partners with provision of services and continuing commercial cooperation as part of the agreement.
Theodor Weimer
Theodor Weimer, CEO of Deutsche Börse AG, commented:
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, said:
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
Stephan Leithner
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, added:
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 formed company is expected to have a significant mark in the fund distribution services as part of the Deutsche Börse Group. Fondcenter AG will compliment and boost the existing Fund Desk business in Clearstream. Deutsche Börse Group’s forecast for the next few years sees a meaningful increase in Fondcenter’s revenue by double-digit rates.
This acquisition and subsequent partnership will pave the way for Clearstream’s growth in Business to Business (B2B) fund services as it is set out in the Deutsche Börse Group’s “Roadmap 2020” strategy. Clearstream has steadily grown over the past few years with the acquisition of Swisscanto Funds Centre Ltd and turning it into Clearstream Fund Desk, as well as acquiring Ausmaq, a Sydney-based managed fund and term deposit custodian.