Fulcrum Group Combines $100bln unit to serve 1000 hedge funds
Wednesday, August 6, 2008 : PermalinkWest Palm Beach (HedgeCo.net) - Fulcrum Group, a leading global administrator for hedge funds and the alternative asset management industry, backed by global private equity firm, 3i, and Butterfield Fund Services (BFS), a top-twenty provider of administration services for investment and pension funds and part of The Bank of N. T. Butterfield & Son Limited (Butterfield), today announced, subject to regulatory and governmental approvals, an agreement to merge the two businesses to create Butterfield Fulcrum Group (BFG).
Headquartered in Bermuda, BFG will have approximately 400 employees in 10 locations across 9 countries. The firm will have close to $100 billion in assets under administration from nearly 1,000 hedge funds, fund of funds, private equity and institutional investment management clients. BFG is expected to rank amongst the top 10 independent alternative asset fund administration companies in the world.
Butterfield will retain a substantial equity stake and 3i, an existing shareholder in Fulcrum Group, will own a majority interest in Butterfield Fulcrum Group.
“This is an enormous win-win for both companies that will leverage sales and operational capabilities of Fulcrum Group, and the tremendous customer relationships and global reputation of Butterfield Bank Group.” said Akshaya Bhargava, Chief Executive Officer of Fulcrum Group. He added, “Our vision is to create the best fund administration company in the world.”
Alan Thompson, President and Chief Executive Officer of Butterfield, echoed Mr. Bhargava’s sentiments, saying “We believe that the merger of these two highly successful businesses will result in significant business growth, more services for fund administration customers and career opportunities for employees. In BFG, Butterfield and Fulcrum are creating a company that will have a powerful presence in fund administration globally.”
Mr. Bhargava will become the Chief Executive Officer of BFG and Jill Considine, current Chairman of the Fulcrum Group, will be the Chairman of the BFG Board. Mr. Thompson and Graham Brooks, Executive Vice President, International at Butterfield will also join the BFG Board, along with other representatives from Fulcrum and 3i.
“This merger brings together two highly complementary fund administrators to offer a full-service platform of significant scale that has a business model and operational structure to achieve industry leadership,” said Ms. Considine. “BFG will be able to leverage the market reputation of one of the world’s premier banks, a very efficient operating platform and a highly talented and motivated management team.”
Both companies share common corporate values and bring significant strengths to BFG, in addition to sharing a highly customer centric and a high touch personalised service approach. BFG’s global operations model and use of many industry best practices is expected to significantly enhance the company’s ability to meet increasingly complex demands from its customers.
Commenting on the synergies to be realised through the formation of BFG, Mr. Brooks said, “In Fulcrum’s management team, we have found a like-minded group of fund administration professionals who share our focus on customer service and a desire to be among the top global providers of services to alternative investment strategies. We are excited about the growth prospects of BFG.”
Representatives of both Fulcrum and Butterfield noted that ensuring seamless delivery of client services during the integration is a top priority for BFG. “Clients will continue to receive the same high levels of service and from the same relationship centres while the two companies are being integrated,” said Mr. Bhargava. “We expect integration to be completely seamless from a client point of view.”
Whitney Bower, 3i Partner, added of the merger "We are proud to have been a part of Fulcrum’s growth and believe that Butterfield Fulcrum Group will be a major force in the global fund administration industry. Our industry knowledge and strong global network have enabled us to support Fulcrum’s international expansion, particularly in Europe and India, and we very much look forward to accelerating this growth through the partnership which this merger of Fulcrum and Butterfield brings. The merger of Fulcrum and Butterfield is also a testimony of 3i’s partnership style focused on driving growth."
Merrill Lynch acted as a third-party adviser to Fulcrum Group on the agreement, while UBS Investment Bank advised Butterfield.
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