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Rating:Citi Sells Its Funds TA Biz to an Ally Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, April 10, 2015

Citi Sells Its Funds TA Biz to an Ally

Reported by Neil Anderson, Managing Editor

Citi just sold its U.S. mutual fund transfer agency business.

Yesterday Doug Morgan, president of SunGard's institutional asset management business, confirmed that SunGard bought the Citi U.S. long funds transfer agency business and that the deal is a "key catalyst" for the software giant "expanding its transfer agency capabilities by adding a full-service industry utility offering to its managed services suite." The SunGard team is positioning their transfer agency efforts as ones that might appeal to fundsters, as well as TPAs and custodians, by not competing with them.

A spokesperson for Citi confirmed the accuracy of SunGard's press release, but declined to comment further on the deal. MFWire could not immediately reach a spokesperson SunGard to comment on the pricing, timing, or terms of the deal, or on the size (in terms of mutual funds and fund families supported, staff, etc.) of the Citi business that just sold.

MFWire has learned that the deal does not include other parts of the Citi business, like its hedge-fund servicing business.

Citi bought what was then Bisys, including Bisys Fund Services, in 2007, though it sold the distribution part of the business. Then, during the financial crisis in 2008 reports surfaced pointing to Citi Global Transaction Services (which included Citi's fund services business) as a "sales opportunity" for the bank, which had just received a government bailout.

Morgan describes the SunGard-Citi deal as "a natural extension of SunGard's current transfer agency capabilities."

"We continue to invest in new and enhanced technologies while helping to ensure a seamless customer experience, and believe this new business model will result in improved services and features for our current and future customers," Morgan states.

Frank Strauss, principal at Beacon Consulting Group, frames SunGard's purchases of the Citi business in the context of "asset managers and TPAs reviewing their service models" after the financial crisis.

"Increased expense pressure, a focus on institutional assets, industry factors and antiquated platforms have resulted in a re-evaluation of whether the transfer agency function is still a viable offering for them," Strauss states. "All the while, market dynamics are driving an explosion in new products and jurisdictions, so a neutral transfer agency utility could be well received by the market at this time." 

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