Clearstream announced today that it was buying Filinks from CDC Ixis Capital Markets, in order to enhance the mutual fund processing capabilities of its Vestima platform.
Filinks has developed a technology (FORS) which Clearstream says can dramatically improve STP rates in domestic order routing of mutual fund transactions. “Clearstream has identified that this technology is complementary to its existing Vestima service and has now completed the purchase of the company,” explains Claerstream parent Deutsche Borse. “Both Vestima and FORS will now be integrated together to deliver an advanced solution to resolve the recognised market inefficiencies. The acquisition is expected to positively enhance revenues from the Vestima service from Q4 2003 onwards.”
The acquisition suggests that Clearstream has decided Vestima, whose location in the mutual fund processing capital of Europe has yet to afford it the anticipated advantages, is now looking to take on domestic business in the various European markets as well as the cross-border and offshore sectors. Its following among the European universal banks which still dominate mutual fund distribution on the Continent makes this a realistic move.
“This acquisition is very important to us as we are seeking to build upon the success of Vestima by further enhancing its capabilities,” says Andr Roelants, President and CEO of Clearstream. “The Filinks technology and the team of people involved will bring extra expertise and experience to Clearstream as we look to further develop our services to the investment funds industry. This acquisition demonstrates our commitment to bring solutions to what is today a real problem area within the industry.”
Vestima, which was introduced in October 2000,enables mutual fund orders to be processed automatically. Unlike the Euroclear equivalent, FundSettle, it is integrated with the Creation securities processing platform. Clearstream reckons this makes it easier for existing Clearstream customers to work with Vestima, since they do not have to transfer existing fund positions or open new accounts. Vestima users include UBS, Flemings, Schroders and Threadneedle Investments.
Bruno Zutterling, the President of Filinks, will join the Claerstream staff. “We are very excited about the future possibilities of growth within the investment funds industry and combining our strengths with Clearstream presents a unique opportunity to develop a service offering that the industry needs,” he says. “The growth potential is considerable and we are now perfectly positioned to develop our services with Clearstream.”