SGG Group, the fund administration business backed by Astorg Partners, has acquired rival administrator Augentius for an undisclosed sum.
The deal will see SGG grow its assets under administration from around $250bn (€214m) to $400bn. It follows a busy period of acquisition for the business, which has acquired Lawson Conner, Iyer and First Names group during the last seven months. SGG Group was advised by Baird on the transaction and Augentius was advised by William Blair.
“We have had a relationship with Augentius for a number of years. It is a business that is growing fast, but the most important thing for us is that the Augentius management team will stay on with the business and become SGG shareholders,” SGG’s chief executive Serge Krancenblum said.
Despite strong interest in Augentius from a number of financial sponsors and rival fund administrators, the deal was negotiated on a bilateral basis.
“There are only a handful of platforms that have the size and scale of Augentius, so it had received a lot of contact from a number of interested parties,” Krancenblum said. “We put the management team at the centre of the process and that made the big difference. It is all about the people.”
Augentius, which is led by chief executive Ian Kelly, employs more than 650 professionals and offers a suite of fund administration, depositary, regulatory and compliance solutions to institutional investors across 13 jurisdictions including the UK, Guernsey, the US, Luxembourg, Singapore and Hong Kong.
“This is a hugely exciting opportunity as this deal will bring a wealth of new opportunities for our newly combined businesses, and especially for our clients,” Kelly said in a statement. “SGG Group is one of the main consolidators of the industry and we are pleased to join forces with a global investor services firm which has the ambition to build a sustainable firm for this generation and the next.”
When the Augentius deal completes SGG Group will employ more than 2350 professionals in 24 jurisdictions.
“This acquisition is in line with our ongoing commitment to developing our product offering and geographical reach to become the leading global partner for the alternative investment industry,” Krancenblum said in a statement. “I am very excited by the acquisition of Augentius as it represents a transformational milestone for our business.”
Private equity firms have been active investors in fund administration, which is characterised by long-term contracts, high cash conversion and consolidation opportunities. Recent private equity deals in the sector include Inflexion Private Equity’s acquisition of Ocorian, Hg’s sale of Radius to Vistra in April, CBPE Capital’s IPO of JTC in March, which generated a 4.4x return for the firm, and Silverfleet’s 3.8x money exit of Ipes to Apex.
Krancenblum said SGG would continue to pursue M&A opportunities, especially in adjacent business lines of compliance, advisory and regulatory software.