Northern Trust announced yesterday it had acquired Bank of Ireland Securities Services (BOISS) including its fund administration, investment operations outsourcing and custody business for up to 60 million. Despite being a top rated Irish service provider in GCs Survey of Agent Banks in Major Markets, the partially nationalized Irish bank has been forced to sell off parts of its business by the Central Bank of Ireland to recover assets after losses in the financial crisis. The acquisition, subject to regulatory approval, is anticipated to close in Q2 this year. Global Custodian spoke exclusively with Steven Fradkin, president of Corporate & Institutional Services at Northern Trust, about the deal.
GC: Did Northern Trust approach Bank of Ireland Securities Services to buy its business, or was it the other way around?
SF: Northern Trust had long admired the client franchise, capabilities and employee talent that Bank of Ireland Securities Services had developed over the years. There was knowledge, familiarity and mutual respect between the management teams, which helped the dialogue take place when the time was right, and that ultimately contributed to a successful transaction.
GC: What made the Bank of Ireland Securities Services business particularly attractive for Northern Trust?
SF: As with all acquisitions, many factors combined to make this an attractive business for Northern Trust. A few of the important factors related to BOISS included: the opportunity to forge relationships with some very attractive clients; a new set of capabilities to serve the high-growth ETF administration market; some outstanding human capital talent in the Irish market that could join, and complement, our existing and strong team; a combined business that results in a decisive position of market leadership in the offshore fund marketplace in Ireland; and a strong and well performing business with attractive returns and future potential.
GC: How will Northern Trust integrate the Bank of Ireland Securities Services business with regard to staff, systems and technology?
SF: Northern Trust undertook extensive due diligence and has a thoughtful plan in place to integrate our businesses and leverage the strengths of both BOISS and Northern Trust for the benefit of our clients. More than 300 BOISS staff will transfer to Northern Trust, and executives of both businesses will work closely to ensure a smooth integration. We plan to consolidate staff into Northern Trusts office over time and, since both organizations utilize the same core technology, we believe this will be helpful as we work through the integration process. The businesses will be fully integrated over approximately a 24-month period.
GC: With the NAV of Irish-domiciled funds on the rise, is this acquisition particularly timely?
SF: Yes. The continued attractiveness of Ireland as a domicile of choice for fund managers and other sponsors should provide additional opportunities for growth in the future.
GC: Can you divulge NT’s current and expected AuC/AuA in Ireland?
SF: We anticipate that when the transaction is complete, Northern Trusts combined assets under custody and administration in Ireland will increase by approximately 70 billion (approximately $96 billion).
Christopher Gohlke