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Custom House and Equity Fund Services target USD55bn in assets after merger

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Custom House Global Fund Services, the parent company of Dublin-based hedge fund administrator Custom House Administration & Corporate Services, and Equity Fund Services, the fund admi

Custom House Global Fund Services, the parent company of Dublin-based hedge fund administrator Custom House Administration & Corporate Services, and Equity Fund Services, the fund administration unit of independent trust and fiduciary services provider Equity Trust, have announced plans to merge their operations. The terms of the transaction have not been disclosed.

The merger of the two businesses, which is subject to regulatory approval, will be effected through a new Malta-domiciled holding company, Equity Fund Services (Holdings). The merged business will have more than 260 employees in Ireland, the US, Singapore, Luxembourg, the Netherlands, the Netherlands Antilles, Guernsey and Hong Kong.

Custom House founder and chairman Dermot Butler, who is also deputy chairman of the Alternative Investment Management Association, and the Dublin-based group’s managing director, David Blair, will hold the same positions in the merged business, which will operate under the Custom House name.

‘The principals of both companies believe the value of the combined businesses will be greater than the sum of the two parts,’ Blair says. ‘The combined businesses will have assets under administration of close to USD50bn.’ Blair, who expects to assets to reach USD55bn before the end of the year, adds: ‘Administering more than USD50bn will put us in a new league.’

Butler, who founded Custom House in 1989, says: ‘Over the past five years, we have witnessed the acquisition of many independent hedge fund administrators. The enlarged Custom House will provide even better services to our clients and strive to meet the aspirations and ambitions of the combined staff.’

He also notes that a striking characteristic of large fund administrators is their reluctance to take on hedge funds with assets of less than USD200m. ‘As at least 70 per cent of all hedge funds have assets of USD200m or less, this has opened up the market to us,’ Butler says. ‘While both companies have clients with net assets of USD1bn or more, the USD50m to USD300m hedge fund market is a very profitable source of business. With USD50bn under administration, we will be in pole position to service those clients on a worldwide basis.’

Joost Lobler, the current managing director of Equity Fund Services, says: ‘The economies of scale of the new organisation will give us tremendous commercial opportunities. Our global coverage and extended client range gives us a very interesting competitive edge over competitors in our league. I very much look forward to working with Dermot and David and their team.’

Equity Trust’s chief executive Hugo van Vredenburch adds: ‘Equity Trust’s reputation and solid performance has been built on the delivery of high quality services to its private, corporate, institutional and intermediary clients. This merger continues our strategy of partnering quality businesses. We will continue to identify strategic acquisitions and partnerships that enhance our global service offering.’

Custom House, whose primary business is the provision of full administrative services to alternative investment and hedge funds, operates through offices in Dublin and representative offices in Chicago and Singapore, and has a total of some 240 staff.

Equity Trust provides trust and fiduciary services including trustee services, corporate management, structured finance, investor support and fund administration to high net worth individuals, corporations and intermediaries. The group has around 1,000 employees in a total of 29 jurisdictions in Europe, the Asia-Pacific region, the Americas and the Caribbean, including Luxembourg, the Netherlands, Switzerland, the UK, Jersey, Guernsey, Liechtenstein, Malta, Hong Kong, China, Singapore, Labuan, Mauritius, the US, Brazil, Uruguay, the Netherlands Antilles, the BVI, Bermuda, Aruba and Cayman.

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