Clearstream has opened a hedge fund processing center in Dublin to extend its post trade offering to hedge funds.
Clearstream Banking, Dublin Branch, will extend the companys investment funds business to alternative funds and allow Clearstream to service the entire range of funds: mutual funds, exchange-traded funds and hedge funds. Over time the business will be fully integrated into Clearstreams fund processing environment.
Christian Westerholt, previously head of Product Development in Clearstreams Investment Fund Services area, will be the General Manager of the Dublin branch.
Clearstreams currently providers investment fund services, including order routing, for about 1000 clients investing in 100,000 funds. These mainly support investment into plan vanilla funds however when these distributors and investors now invest in hedge funds they will be routed to the new operation in Dublin.
Michael Noonan TD, Irelands Minister for Finance, said: The Financial Services sector is a key driver of jobs in Ireland. I am delighted that Clearstream has taken the decision to establish an operation centre for servicing the investments into hedge funds in Dublin with the potential for more than 100 jobs.
The venture has already created 15 jobs in Ireland.
Jeffrey Tessler, CEO Clearstream, said: The new Dublin base broadens our value proposition in the investment funds spaces adding to our established investment funds base in Luxembourg. The new specialised unit based in Dublin will provide the operational capabilities for hedge fund services to customers around the world. The talented pool of expertise and the proximity to the hedge fund industry have been the key drivers for our choice of Dublin. Our product range for investment funds will soon provide customers with a single, fully automated point of entry for routing orders to fund managers across all funds types.
Philippe Seyll, head of Investment Funds Services and Member of the Executive Board of Clearstream, said: Hedge funds are highly complex and diverse instruments. Processing of hedge funds therefore requires a lot of manual effort which comes at significant operational risk and involves cost that are approximately 100 times higher than for other fund types. Our aim is to increase efficiency in the hedge funds processing space and to offer investors a superior value proposition at a better price.
Clearstreams investment funds services business currently accounts for 10% of revenues of the overall group. The plan is to increase that to 30% in five years. The hedge fund service will compete with Citco and Euroclear on fund processing capabilities and sees Clearstream taking advantage of the time zone and specialist fund servicing expertise in the domicile.
The hedge fund processing center has already signed five pilot customers. The new center is an operating company and a branch of Clearstream Bank Luxembourg.
(JDC)