The business, which is based in Cork, Ireland, will be sold to Clearstream for an amount in the “mid double digit million euro range”, according to a statement released by the firms.
Philippe Seyll, member of the executive board and head of investment funds services at Clearstream, said: “The additional business of CGSS’s hedge fund custody operation enables us to fast-track our standardisation and automation initiatives in the hedge funds industry and to offer our financial institution customers a superior value proposition.”
Citco and Clearstream signed an agreement for the sale, which will go ahead in due course.
The statement said the buyout would allow Citco to focus on its core fund investor client base which is mostly fund of hedge funds, family offices, insurance companies and pension and endowment schemes.
Some 300 employees of CGSS will move to Clearstream which will have a license to use Citco’s custody IT infrastructure.
“We are delighted to be able to offer our financial institution clients the opportunity to combine Citco’s capabilities in the alternative sector, together with Clearstream’s existing fund platform for a true one-stop-shop fund processing product,” said William Keunen, global head of Citco’s asset servicing business.
He added that Citco’s alternative investor services business would continue to focus on providing a full suite of asset-related services its core fund investor client base.
Keunen also suggested that Citco and Clearstream would develop further linkages in the future.