The "fast-growing" fund administration market has seen a €235 million acquisition, as Temenos Group, a software provider listed in Switzerland, buys Luxembourg's Multifonds.
Multifonds, founded in 1995 and which now has over 470 employees, creates software for fund administrators to perform accounting functions, such as valuations.
The software also supports investor servicing tasks and transfer agency functions, such as record keeping.
Temenos, also a software provider and which gains client relationships with 30 of the world's largest financial institutions from the deal, says change in the fund administration market is creating a structural need for third-party software.
Margin pressure within asset management firms leads them to outsource to third-party administrators who have the scale to operate at lower costs, or to reduce their infrastructure costs by investing in scalable IT platforms, Temenos says.
Multifonds is used by nine of the top 15 institutions in third-party fund administration, according to Temenos, and helps customers improve efficiency by around 40% on average.
Oded Weiss, chief executive officer of Multifonds, will continue to run the company along with its current management team. In addition, Weiss joins Temenos senior management.
Weiss says Multifonds will have the opportunity to grow much faster by leveraging Temenos' sales and marketing, partner and research & development infrastructure.
The acquisition is due to close today (March 5). Temenos was advised on the transaction by Barclays, Davis Polk & Wardwell, and PwC.
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