Frankfurt-based Universal Investment Group, a leading asset services provider with Super ManCo status in Luxembourg, on Tuesday flagged further European growth ambitions outside German-language countries when it announced it had reached agreement on its acquisition of European Fund Administration for an undisclosed amount.
The acquisition of EFA, founded in 1996 and active in Luxembourg and France, boosts Universal’s assets under administration by more than a fifth to above 900 billion euro and brings the number of investment funds and mandates that it supports to more than 7,000.
“Jointly, both companies want to significantly develop geographical regions like the Nordics, France and Benelux,” said Michael Reinhard, CEO of Universal Investment.
“Partnering with EFA is another milestone not only to reach our objective of becoming the leading European investor services platform and Super ManCo but also regarding our ambition to provide customers the full investor services spectrum,” he said.
EFA to retain own identity
EFA will retain its own business identity as part of the Universal Investment Group and under the Universal Investment brand. EFA compliments Universal Investment’s business model, it said, and will further broaden the portfolio of services for international clients. Universal Investment Luxembourg will continue to operate independently from EFA as the group’s successful international third-party ManCo and AIFM.
Reinhard said that EFA was “a perfect fit for Universal Investment and our growth story.”
The companies have cooperated as business partners for several years. Reinhard said he is “impressed by the commitment and skill of their people, the quality of their services and its success in becoming ‘more than a fund company’.”
Current shareholders become ‘strategic clients’
Universal announced on Tuesday that it had reached agreement with Banque de Luxembourg, Banque et Caisse d’Épargne de l’État, Oddo BHF, Quintet Private Bank (Europe) S.A. on the transaction. Financial details were not disclosed. The current shareholders will stay on “as strategic clients… committed to contribute to the long-term success of EFA as a member of Universal Investment Group,” the announcement said.
The transaction is subject to regulatory clearance by the Luxembourg financial authority CSSF and is expected to be completed in the second half of 2022.
Founded in 1996, and with assets under administration of close to 167 billion euro at the end of 2021, EFA provides fund administration services, private asset services, and front-, middle-, and back-office services to banks, asset managers, insurance firms, wealth managers, family offices, and institutional investors.
‘Progressing successfully’
Universal Investment Group is a European fund service platform with around 750 billion in assets under administration, about 2,000 mutual and institutional fund mandates and a workforce of more than 1,000 at locations in Frankfurt am Main, Luxembourg, Dublin, London, Hamburg and Krakow.
The company said that in addition to the German-language countries such as Germany, Austria and Switzerland, it is “progressing successfully” in its internationalisation “by leveraging the company’s Luxembourg and Irish fund hubs, especially for international asset managers.”
EFA will serve as Universal’s international investor services platform located in Luxembourg and France in addition to the Frankfurt based platform for the DACH region.
“Our customers will benefit from additional solutions for alternative investments and private assets,” said Reinhard. “Combining these successful business models will further accelerate growth and internationalization of the combined company.”
Shared views on open architecture
Fernand Reiners, Chairman of EFA’s Board of Directors, said its shareholders share the ambitions laid out by Universal.
“Both were created by financial institutions to pool operational skills and investment,” Reinders said. “This allowed their founders and other clients to focus on their core businesses, while both companies grew to market-leading non-bank investor services firms. Two success stories, we are confident will continue by entrusting EFA to Universal Investment Group.”
Both EFA and Universal have dedicated business models focused on asset services and share the idea of an open architecture platform for the financial services industry, the companies said. “Customers will profit from a joint financial services company with a dedicated business model, new product developments especially in the private and alternative asset space and the innovative strength” specifically for digital assets, the statement said.
Related articles on Investment Officer Luxembourg: