SGG Group, an investor services firm, has sealed up its acquisition of Augentius, the largest independent private equity and real estate administrator in the world, after receiving regulatory approval.
SGG, which is backed by private equity firm Astorg Partners, is the fourth largest independent investor services firm and one of the top three administrators in the alternative investments industry globally.
The administrator now has $400 billion in assets under administration for 600 fund managers, up from $250 billion in AUA and 350 fund manager clients before the acquisition. This helps build SGG’s presence globally, especially in Europe.
“As a combined business, we now have a major presence in the UK along with full scale in the fund services sector across the Channel Islands and in Asia, along with a significant presence in the US market,” Justin Partington, group fund solutions leader at SGG, told pfm.
Along with the acquisition, Augentius’s chief executive, Ian Kelly, will become SGG’s new managing director of Ireland and the UK. Jimmy Leong, formerly Augentius’s managing director of Asia, will now be SGG’s managing director for its Asia funds business.
The deal follows a string of acquisitions that SGG has made in the industry over the past two years, including of service provider First Names Group in July. The fund administration industry as a whole has seen continued growth in this consolidation trend.
“Building fund administration businesses of size and scale across multiple global locations has become more challenging over the last 10 years,” Kelly said.
Companies who start reaching a plateau in their growth often see mergers and acquisitions as a way to quickly increase their growth revenue or avoid “revenue leakage from existing clients setting up structures outside of the home jurisdiction,” Kelly said. “As the industry coalesces around a future vision of six to eight large global players, the consolidation trend looks likely to continue, though technology remains a disruptive threat and opportunity for our sector as with most other financial services businesses today.”
There were a number of significant acquisitions in the fund administration industry last year, some of which were officially completed this year, such as Vistra’s acquisition of Deutsche Bank’s corporate services firm, which was announced last year and made official in August. UBS’s sale of its fund administration unit to Northern Trust also took place last year, as reported by pfm.