The consolidation of the private equity fund administration business has continued with J.P. Morgan agreeing to purchase the private equity administration business of Schroders. The acquisition comes less than six months after State Street bought Mourant International Finance Administration, turning the Boston-based custodian into the largest alternative asset administrator in the world.
Details of the deal were not disclosed.
State Street’s earlier acquisition must have quickened pulses in J.P. Morgan’s private equity team. In the 2009 Global Custodian Private Equity Fund Administration survey, the two banks were neck-and-neck behind CACEIS Investor Services in terms of ratings.
The Mourant private equity arm held $130 billion under management, dwarfing the Schroders business, which based in Guernsey and Bermuda, currently has $6.2 billion in committed capital under administration. J.P. Morgan administers $135 billion in committed capital from limited partners, and $81 billion from fund managers.
Where the Schroders deal is key for J.P.Morgan is in the firm’s global expansion as Mourant was the one truly global private equity administrator prior to 2010. J.P.Morgan’s additions in Bermuda and the Channel Islands will complement recent office openings in Luxembourg and another due in Hong Kong, increasing its reach and competitiveness.
Schroders’ private equity administration business was initially developed to support Schroder Ventures, an in-house private equity business that is no longer part of the Schroders Group, and later expanded into third-party administration. Markus Ruetimann, Group Chief Operating Officer at Schroders said, We believe that J.P Morgan will be able to realize the full growth potential of the private equity administration business through the combination of our operations and WSS. J.P. Morgan is one of our most trusted fund service partners and we believe that this transaction will ensure the continued delivery of a high standard of service to our private equity administration clients.
A recent survey from Preqin also highlights the positive future for the industry, with the secondary market poised for growth after 48% of investors in private equity funds saw private equity investment increasingly valuable to their strategies.
We believe there is strong synergy between our two businesses, said James Hutter, global business executive for J.P. Morgan’s private equity fund services division. We share a common origin being among only a few administrators that grew out of private equity firms, our product offerings and technology are very complementary, and we both are known for having a strong service culture.
J.P Morgan uses Investran, plus a mix of vendor and proprietary applications.
GCTV:Click here to watch J.P. Morgan/Schroders Deal Webcast