Fortis agrees sale of hedge fund unit to Credit Suisse

Date: Tuesday, May 11, 2010
Author: Hedge Funds Review

Credit Suisse is to buy Fortis Bank Nederland’s hedge fund administration unit Prime Fund Solutions (PFS) after months of negotiation.

News that the two banks were in talks broke in December 2009. Fortis has now announced agreement has been reached. A spokesperson said the price of the deal would not be disclosed.

Credit Suisse has signed a sale and purchase agreement with Fortis and it is expected that the sale will complete before the end of the year.

The sale of PFS followed a strategic review by Fortis which concluded it would re-focus on core banking activities and would seek a suitable partner to further the growth of the administration business.

The acquisition will further boost Credit Suisse's alternative investment offering. Prime services head Philip Vasan said PFS was a "strong fit" with Credit Suisse's strategy and would create a more complete offering for its hedge fund clients.

At the end of 2007, Prime Fund Solutions had $325 billion in assets under administration, including $200 billion in fund of hedge fund assets and $125 billion in single manager funds, making it one of the world's largest fund administrators at the time.

The business has not disclosed the level of assets under administration since then, although it is thought to have dropped steeply since peaking in 2008.

The Prime Fund Solutions business remains one of the largest in the industry, with operations in Ireland, Luxembourg, Isle of Man, Amsterdam, Cayman Islands, Curacao, Hong Kong and Singapore. It also has representative offices in Geneva, London, New York, Boston and Tokyo.

The announcement continues a wave of consolidation within the fund administration industry. In December 2009 State Street acquired Mourant International Finance Administration from offshore law firm Mourant du Feu & Jeune. In February 2010 BNY Mellon announced it was buying PNC's Global Investment Services.