Abacus, the Isle of Man-based provider of fund and fiduciary services, has continued the consolidation trend among boutique fund administrators through its acquisition of Portal Fund Administration, also in the Isle of Man.
The acquisition is part of Abacus ongoing growth strategy that it has pursued over the last 18 months.
Paul Kneen, managing director of Abacus, said: We have successfully established a new European office in Malta; we have built upon the strength of our existing resources with a number of key senior appointments within our Isle of Man and Malta offices; and we have undertaken an extensive sales and marketing drive, which has resulted in the successful expansion of our business lines. The acquisition of Portal is a further important step within our corporate development strategy, which provides us with a broader foundation to assist in raising Abacus international profile as we continue to seek out new opportunities for growth.
Portal Fund Administration, the five-year-old company jointly owned by investment manager Thomas Miller and fiduciary services provider Boston Limited, currently manages a wide portfolio of funds, providing a range of administrative and operational services including; fund establishment, reporting and accounting, net asset value calculations, shareholder registrar and corporate services, and compliance and regulatory services; all of which complement Abacus existing service offering.
Abacus has 35 years of experience in providing fund administration services for the full spectrum of onshore and offshore fund structures including private exempt schemes, institutional funds, retail and UCITS compliant structures.
In an interview with GlobalCustodian.com Sandra McAuliffe, business development director at Abacus, expanded on the rationale behind the acquisition: Portals owners already had a number of their funds administered by Abacus and they wanted a closer working relationship with us. Since fund administration was not core to their business they sold Portal to us so that they could focus on their core business of investment and fiduciary services. We wanted to make sure we were always looking at ways to continue to grow our business. Portal has nine staff members and $500 million in AUM so the acquisition enables us to expand.
Abacus has $2.7 billion in AUM with 20 staff members.
McAuliffe continued: With this acquisition we anticipate profitability improving because of the economies of scale that it will bring, she said. She added that the acquisition would further extend Abacus capabilities and enlarge its fund administration platform. We are pursuing a strategy of growth over the next three years and we are open-minded to further acquisitions. We also want to develop our European business.
Paul Kneen will head up the combined operation while Steve Edmonds, managing director at Portal, will continue to work on fund accounting services.
Portal will be rebranded as Abacus at the beginning of 2012. In the meantime, staff and operations have relocated to Abacus headquarters in Douglas, Isle of Man.
The acquisition makes Abacus one of the top five fund administrators in the Isle of Man. The company has further benefitted from the recent departures of the larger fund administrators such as Credit Suisse.
Last week, Opus Fund Services acquired the fund administration unit of San-Francisco-based Agile Hedge Solutions.
The saturation of the boutique fund administration space that is, the proliferation of smaller, independent administrators has resulted in a great deal of consolidation over the past decade. Mergers and acquisitions have become particularly heightened in the wake of the financial crisis, which slashed hedge fund asset values and, as a result, assets under administration and profits for administrators. That has led to a mentality among some administrators that they must buy out rivals to gain market share or else wind up on the auction block.
(JDC)