Apex Fund Services has acquired Equinoxe Alternative Investment Services while simultaneously gaining new private equity backing from Genstar Capital.
The independent fund service provider – which topped multiple client satisfaction categories in Global Custodian’s hedge fund admin survey – will now administer close to $80 billion in assets.
Speaking to Global Custodian, founder and CEO Peter Hughes stated his ambitions to continue to grow through acquisitions following the recapitalising agreement with Genstar.
“We’ll be looking to add meaningfully-sized acquisitions – through transformational acquisitions – over the next three years,” Hughes explained. “We want to make sure the model delivers client service that people love. Clients do generally like our service, which is why we do well in the major surveys.”
The hedge fund administrator space has been rife with consolidation in recent years. Earlier this year, Northern Trust agreed to snap up the UBS Asset Management fund administration servicing units in Luxembourg and Switzerland, containing approximately $413 billion in in assets.
At the end of 2016, SS&C Technologies completed the acquisition of Wells Fargo’s Global Fund Services (GFS) business, taking on its $42 billion in alternative assets under administration, the latest in a string of purchases from the admin giant.
Equally administrators including BNY Mellon, MUFG, and other shops such as Custom House, have also been expanding through acquisitions.
Hughes added that Apex aims to use the private backing to break into the top five administrators, as it relies on its model to compete with the incumbent heavyweights which currently top the assets under administration table.
“Equinoxe is a nice fit for us as it’s built in the same way with the same ethics of putting clients first. So culturally it should be a simply integration which is important,” he said.
Apex plans to increase its assets under administration to $200-$300 billion within the next three years. This would place it just below the likes of SS&C, State Street and BNY Mellon.
The independent fund administrator will aim to do this through both acquisitions and focusing on growth areas such as private equity real estate, which is on the rise.