Northern Trust has confirmed reports it is buying Omnium, the fund administration arm of Citadel with approximately $70 billion in assets under administration. Terms of the deal were not disclosed, although it has been reported Northern Trust will pay $100 million for the business.
Rumors of an acquisition emerged in March, but Northern Trust at the time declined to comment.
Omnium will be integrated into Northern Trusts Corporate & Institutional Services business, and will be renamed Northern Trust Hedge Fund Services, LLC. The business will provide comprehensive administrative and middle office services including trade processing, valuation, real-time reporting, cash management, accounting, collateral management and investor servicing.
In todays markets, asset managers and institutional investors demand high performance, greater transparency, and outstanding technology from their administrator, says Frederick H. Waddell, chairman and CEO of Northern Trust. This acquisition brings together the best in hedge fund administration expertise, along with Northern Trusts robust global custody capabilities and our highly respected client focus. The result is a unique opportunity to scale a world-class business.
The acquisition is subject to regulatory approvals and is anticipated to close in the third quarter of 2011. Northern Trust and Omnium are both headquartered in Chicago, while Omnium has operations in New York, Hong Kong and Bermuda.
The hedge fund industry has changed rapidly in the past five years, driving the need for increasingly sophisticated solutions, says Steven L. Fradkin, president of Northern Trust Corporate & Institutional Services. Northern Trust Hedge Fund Services will help clients in a wide variety of asset classes that require a high level of automation and expert operational support and effective risk management.
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