Clearstream to acquire majority stake in UBS’s fund distribution platform

The purchase and subsequent partnership with UBS marks another active move from Clearstream into bolstering its fund services offering.

By Jonathan Watkins

UBS has agreed to sell a majority stake in its fund distribution platform to Clearstream, combining two businesses which will have over $230 billion in assets under administration.

Clearstream will pay just over $400 million to UBS for 51% of the business.

Upon completion of the deal, the Deutsche Boerse-owned central securities depository (CSD) will combine UBS’s Fondcenter with its Fund Desk in a bid to significantly bolster its global offering.

Cleartstream has been actively boosting its fund services and distribution capabilities over the last two years, beginning with the acquisition of London-based funds platform Swisscanto Funds Centre (SFCL) from Zurcher Katonalbank, announced in April 2018.

The Swisscanto Funds Centre platform was integrated under the umbrella of Clearstream Fund Desk in May 2019, combining the fund distribution support services with its processing platform Vestima.

Just weeks later, Clearstream then announced it would take over the managed fund administration business of National Australia Bank (NAB).

With the addition of UBS’ Fondcenter, the united business will now connect around 340 distribution partners with more than 450 funds.

The moves have undoubtedly put Clearstream’s fund distribution network on the map with the $230 billion of assets under administration making it one of the largest in the world. In comparison, the biggest fund distribution network – Allfunds – holds over $600 billion in assets under administration.

As part of the transaction, UBS and Clearstream will enter into long-term commercial cooperation arrangements.

“It complements our product offering in the investment funds distribution space,” said Stephan Leithner, chairman of Clearstream. “Our distributor customers will benefit from extended global fund provider coverage, while asset manager clients will have direct access to UBS GWM premier distribution network as well as access to Clearstream distribution reach. We expect to generate significant synergies from combining our fund distribution businesses.”

The transaction is expected to be completed in the second half of 2020.