Clearstream buys Citco’s Irish hedge fund business

Clearstream has closed a long-awaited deal to acquire the hedge fund custody business, based in Cork, Ireland, of administration firm Citco Global Securities Services.

The firms did not give the precise purchase price but said it was “in the mid double digit million euro range”.

The deal brings 300 employees to Clearstream, which is the clearing and settlement division of Deutsche Borse. It also allows Clearstream to use Citco’s custody IT infrastructure.

Philippe Seyll, member of the executive board and head of investment funds services at Clearstream, says the deal allows Clearstream to “fast-track our standardisation and automation initiatives in the hedge funds industry”.

The firms hope the tie-up will allow Clearstream customers to do all their fund processing – both alternative and conventional funds – through one platform, thus offering a “one stop shop” that will be more efficient than existing fund administration arrangements.

Industry insiders are unlikely to be surprised by the announcement as news of the deal had leaked into the market. This prompted Clearstream chief executive Jeff Tessler to tell a Funds Europe reporter at last year’s Sibos conference, in November, that the Citco deal was the industry’s “worst kept secret”.

©2014 funds europe

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