Dublin-headquartered asset services specialist Waystone on Thursday announced that it has agreed, following years of discussions, to acquire the UK and Irish business of Link Fund Services for an undisclosed amount from its Australian parent. Link’s Luxembourg-based fund services are being put up for sale, as is its operation in Switzerland.
“Link Group is proposing to pursue a separate sale of the Luxembourg and Swiss entities which form part of the FS Business,” a company spokesperson said.
Strassen-based Link Fund Solutions SA was registered in Luxembourg in 2018. Per 30 June 2022 it acted as management company for 21 different legal entities and employed 22 people, according to a filing. For the 12 months that ended last June it has posted a loss of 4.6 million euro.
Woodford Equity Income Fund
The acquisition of the UK and Irish arms by Waystone brings to end three years of uncertainty for some 300,000 investors in the four billion euro Woodford Equity Income Fund, a UK fund, whose collapse was at the heart of Link’s troubles in the UK and Ireland. The UK’s financial regulator FCA said that failures by Link in managing the liquidity of the fund meant that those who didn’t redeem their investments before it was suspended in 2019, were unfairly disadvantaged.
The fund, managed by UK manager Neil Woodford, was not able to handle severe liquidity problems during the spring of 2019 when investors withdrew some 600 million euros within a space of four weeks.
The FCA said it expects that investors that lost money will be able to share approximately 235 million pounds in compensation as early as the fourth quarter. “We think this proposal both maximises the available redress and is the fastest way for it to be paid,” said FCA.
Waystone expands in UK
For Waystone, the collapse of Link FS in Ireland and the UK means another opportunity to expand its activities in London. Its acquisition is still subject to regulatory approvals.
“This transaction is a major milestone for both companies,” said the Dublin-based firm, also highly active as management company in Luxembourg. “Waystone’s goal is to work with investment managers and fund sponsors to build and support fund structures, and to protect the interest of fund investors. Today’s acquisition will boost Waystone’s ability to service a broader pool of investment managers and sponsors, and bring a greater number of products and services to them.”
Waystone last year acquired T. Bailey Fund Services in 2022. The addition of Link’s UK and IRish business will also broaden its UK offering to include transfer agency and alternative administration. In addition, it further expands the Group’s administration offering following its acquisition of Centaur Fund Administration in January 2023. Waystone said its 2022 and 2023 acquisitions are adding some 190 billion dollars in assets under oversight, and see about 600 staff join the firm.
Second UK ManCo in trouble
“We believe that Waystone is uniquely positioned to take LFS forward, providing quality global solutions to support its fund sponsors, investment managers and their underlying investors. We look forward to fully supporting the LFS team and enabling them to focus on continuing to provide exceptional service,” said Rachel Wheeler, CEO global management company Solutions for Waystone.
It’s the second time this month that a management company with substantial business in Luxembourg has bought a smaller UK firm that is in trouble. Bermuda-headquartered Apex Group, which directly competes with Waystone, acquired MJ Hudson PLC, a troubled London-listed provider of management company services in Ireland and Luxembourg, for about 40 million pounds (45.2 million euro).
Link Fund Solutions’ assets under management for Ireland, UK and Luxembourg have been reported at 120 billion euro. A breakdown of this number was not available.
Waystone is currently overseeing over 300 billion dollars in European regulated funds across Luxembourg, Ireland and the UK with a growing staff count of approaching 1,000 employees. The firm has over 21 locations worldwide.
[21 April, 15 CET: article updated to make clear that Link's Australian parent company has said its Luxembourg and Swiss businesses will be put up for sale.]