Apex and Genstar Capital have acquired Custom House, a hedge fund administrator. No financial terms were disclosed. The deal is expected to close at the end of the fourth quarter.
HAMILTON, Bermuda, August 13, 2018 – Apex Group Ltd. (“Apex”), one of the world’s largest fund administrators, and Genstar Capital jointly announced today the acquisition of Custom House, a leading global hedge fund administrator delivering services to alternative investment managers across Europe, Asia and the Americas.
The acquisition adds a further $24 billion in assets under administration to the Group’s portfolio and is a strong strategic and cultural fit given its independent business model and focus on delivering a personal approach customer service. The addition of the Custom House business bolsters Apex’s existing hedge fund service arm. With offices in Beijing, Chicago, Dublin, Geneva, Hong Kong, Malta, Rotterdam, Shanghai, Shenzhen, Singapore, Sofia and Sydney, Custom House provides fund administration services to over 200 alternative investment managers and 500 investment funds.
Custom House clients will see immediate value from the transaction, gaining access to an additional 19 jurisdictions, custody and depositary solutions plus corporate services, while retaining the value of working with an independent provider. In addition, Apex has an established private equity framework in place with over $300 billion in private equity assets, which will bring significant additional value and expertise to Custom House clients. The two businesses share common hedge fund technology platforms, ensuring a smooth integration and seamless client experience.
This acquisition is the latest in a series of strategic transactions from Apex over the past year and increases its AuA to $560 billion. It reflects the Group’s continued global growth, adding further weight to its ambition of becoming the largest independent fund administrator in the world. Towards the end of last year, Apex announced the acquisition of the Deutsche Bank’s Alternative Fund Services business, building on its recapitalization by Genstar Capital and acquisition of Equinoxe Alternative Investment Services. This year Apex announced the acquisitions of M.M.Warburg & CO’s Asset Servicing business, LRI Group, and specialist European private equity administrator, Ipes. Combined, these acquisitions strengthen Apex’s suite of services across all asset classes on a local, regional, and global scale.
Terms of the agreement are not being disclosed. The transaction is subject to customary closing conditions, including regulatory approval, and is expected to be completed at the end of Q4 2018.
Peter Hughes, Founder & Chief Executive Officer, Apex Fund Services, said: “When I founded Apex in 2003 we were a specialist hedge fund service provider. Now in our 15th year of business the Group has transformed into one of the world’s largest global administrators servicing all asset classes and geographies, including an extensive private equity framework and expertise. Apex’s founding principles of delivering exceptional client service remain the same today. We built our business on those values which enabled strong organic growth, ultimately resulting in the Group’s recapitalization by Genstar last year. I am proud of the journey Apex has undergone and where we came from. Custom House is aligned with this approach to client service and fits extremely well into the Group, utilizing the same platforms and further bolstering our hedge expertise and capabilities. In turn our extensive private equity and hybrid fund service infrastructure will open up new solutions to Custom House clients and deliver a truly global framework servicing the full value chain of any fund”.
David Barry COO Custom House spokesperson, said:
“For over 25 years we have prided ourselves on delivering the highest level of service to our clients. A key objective of the Group was to find a partner who has a similar ethos and would enable us to continue to put our clients first. We feel that Apex is a perfect partner to achieve this. With combined assets of USD$560 billion, we are excited to be part of the Apex Group, and to support its continued growth and success.”
As part of the transaction, the CEO Mark Hedderman has decided to leave Custom House to explore new opportunities. Mark wishes Apex and Custom House every success in the future, commented Helen Breen – Carroll, CFO.
Sid Ramakrishnan, Vice President of Genstar Capital, said:
“We are excited for Apex to be one step closer to accomplishing its goal of becoming the world’s leading fund services provider. Our conviction in the tailwinds driving the sector, as well as Peter Hughes and the management team, remains high. We look forward to Apex continuing to execute on its organic initiatives and acquisition strategy while delivering best in class service and technology to global clients in an increasingly complex regulatory environment.”
Willkie Farr & Gallagher LLP provided legal counsel to Apex in the transaction.
The Apex Group, established in Bermuda in 2003, is one of the world’s largest fund solutions providers. The Group has continually improved and evolved its product suite and offers a full service solution to its clients: from fund administration, middle office, custody and depositary to corporate services and fund platforms. Apex now administers the investments of some of the largest funds and institutional investors in the world. www.apexfundservices.com
About Genstar Capital
Genstar Capital (www.gencap.com) is a leading private equity firm that has been actively investing in high quality companies for nearly 30 years. Based in San Francisco, Genstar works in partnership with its management teams and its network of strategic advisors to transform its portfolio companies into industry-leading businesses. Genstar manages funds with total capital commitments of approximately $10 billion and targets investments focused on targeted segments of the financial services, software, industrial technology, and healthcare industries. Genstar’s current and previous investments in financial and business services companies include Ascensus, Strategic Insight, Institutional Shareholder Services, Mercer Advisors, AssetMark and Altegris.
About Custom House
Custom House Global Fund Services Limited is a leading independent hedge fund administration specialist ideally located to deliver services in Europe, Asia and the Americas. We partner with established hedge fund managers, start up managers, family offices and institutional managers, with a combination of experience, global presence and technology. Founded in 1989, Custom House grew with the alternative investment industry providing superior fund administration and investor services and today provides one of the most advanced service offerings available to fund managers. With over $24bn in AUA, Custom House provides fund administration services to more than 200 managers and 500 investment funds. The firm has offices in Beijing, Chicago, Dublin, Geneva, Hong Kong, Malta, Rotterdam, Shanghai, Shenzhen, Singapore, Sofia and Sydney. For more information, visit www.customhousegroup.com