Technology vendor SunGard has expanded its transfer agency capabilities by acquiring Citi’s U.S. long funds transfer agency business, while also launching a new utility off the back off the transaction.
The acquisition comes almost three months after Citi announced it was putting its hedge fund administration business and certain transfer agency units up for sale.
Off the back of the acquisition, SunGard will launch a new utility to complement its managed services suite.
Sub-accounting and new regulatory requirements have driven a number of top-tier financial institutions to rationalize their transfer agency functions, increasing their focus on, and investments in, capabilities such as fund accounting, administration and custody.
“The ramifications of the financial crisis have asset managers and TPAs (third-party administrators) reviewing their service models. Increased expense pressure, a focus on institutional assets, industry factors and antiquated platforms have resulted in a re-evaluation of whether the transfer agency function is still a viable offering for them,” says Frank Strauss, principal, Beacon Consulting Group.
“All the while, market dynamics are driving an explosion in new products and jurisdictions, so a neutral transfer agency utility could be well received by the market at this time.”
The tech vendor is also planning a multi-million dollar investment in hardware, infrastructure and software upgrades to support future product development and expansion of its transfer agency offerings.
The utility from SunGard is the latest after it launched a derivatives processing utility, with Barclays becoming the first to sign up for it.
SunGard Acquires U.S. Long Funds Transfer Agency Unit from Citi
Technology vendor SunGard has expanded its transfer agency capabilities by acquiring Citi’s U.S. long funds transfer agency business, while also launching a new utility off the back off the transaction.