Mitsubishi UFJ acquires Meridian

Fund Administration
19 Mar, 2014

Mitsubishi UFJ Fund Services is to acquire Meridian Fund Services as the firm continues to expand.

The deal, which is subject to regulatory approval, will bring Mitsubishi UFJ Fund Services’ Assets under Administration to approximately $165 billion.

Speaking at the Super Return conference in Berlin last month, Blair Henderson, head of business development at Mitsubishi UFJ Fund Services, told COOConnect the firm was looking to make further acquisitions of hedge fund administrators as the Japanese bank seeks to diversify its client base beyond long-only funds and pensions.  This comes following Mitsubishi UFJ’s acquisition of the Bermuda-based Butterfield Fulcrum in the summer of 2013.

The once highly saturated hedge fund administration market is rapidly consolidating, and most believe that only the largest standalone or bank-backed firms will survive. A number of the smaller administrators have struggled to make decent revenues as their clients have failed to grow AuM.

There have been a series of mergers in the fund administration space. In November 2013, US Bancorp Fund Services acquired the Dublin-based Quintillion, having already purchased AIS Fund Administration in 2012.  Other high profile deals have included SS&C’s acquisition of GlobeOp. The highest profile deal of late was the acquisition of Goldman Sachs Administration Services by State Street AIS. 

The incoming Alternative Investment Fund Managers Directive (AIFMD) is also going to cause problems for standalone fund administrators seeking to attract European business. The Directive requires AIFMs to appoint a depository or depo-lite if they market to EU investors via national private placement regimes.

Many standalone administrators with little - if any - balance sheet capital are establishing depo-lites, which are not subject to the stringent liability provisions contained in AIFMD. However, there is speculation the European Securities and Markets Authority (ESMA) could force AIFMs to appoint a full depository around 2018, which would be unviable at standalone administrators lacking a banking license or balance sheet. 

“As regulatory and investor pressures continue to rise, investment managers need a partner who has both a strong balance sheet and can provide a wide range of solutions to meet specific needs,” said Tim Calveley, deputy chief executive officer at Mitsubishi UFJ Fund Services. 

MitsubishiButterfield FulcrumMeridianAIFMDESMAUS Bancorp Fund ServicesQuintillionAIS Fund AdministrationGoldman Sachs Administration ServicesState Street AIS