Clearstream, the post-trade services provider of Deutsche Börse Group, has acquired 51.2% stake in Swiss bank UBS’ fund distribution platform Fondcenter for CHF389m ($401.11m).
The deal paves way for a partnership between the Luxembourg-based Clearstream and UBS in the investment fund services business segment.
UBS will retain a minority stake of 48.8% in the Switzerland-based B2B fund platform, which is said to connect nearly 300 distributors to about 400 fund providers across the world.
Fondcenter is currently part of the Swiss bank’s asset management business division (UBS AM).
Fondcenter to be combined with Clearstream’s Fund Desk business
After the completion of the deal, the UBS’ fund distribution platform will be combined with the Fund Desk business of the post-trade services provider. The resulting combination is expected to create one of the leading B2B fund distribution platforms with footprints across Europe, Switzerland, and Asia.
Deutsche Börse executive board member and Clearstream chairman Stephan Leithner 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 clients will have direct access to UBS GWM premier distribution network as well as access to Clearstream distribution reach.”
The newly-combined fund distribution company, which will retain the name Fondcenter, will hold more than $230bn in assets under administration (AuA).
It will link nearly 340 distribution partners with over 450 fund providers having more than 75,000 investment funds and share classes available across the world.
As part of the deal, Clearstream has agreed for the provision of Fondcenter’s services to UBS’ global wealth management, asset management business divisions and the corporate and institutional clients division of its personal and corporate banking business.
UBS Group CEO Sergio Ermotti 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 Swiss bank is expected to sign an agreement at a later time for a possible sale of its remaining stake in the fund distribution platform to Clearstream.
Subject to customary closing conditions, the transaction is likely to be completed in the second half of this year.
