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Bidders line up for HSBC’s German fund administration and custody units, sources say

By Thomson Reuters Jun 21, 2024 | 3:51 AM

By Amy-Jo Crowley and Emma-Victoria Farr

FRANKFURT/LONDON (Reuters) – State Street, BNP Paribas and Caceis are lining up as potential bidders for the sale of HSBC Germany’s fund administration unit INKA and custody business, three sources familiar with the matter told Reuters.

The process is due to launch in the next couple of weeks, as soon as HSBC decides with its advisers whether to sell the assets together or separately, the sources said, speaking on condition of anonymity.

HSBC is hoping the overall valuation for INKA and the custody unit could be more than 700 million euros ($751.17 million), the first person said.

Other fund administrators including Universal Investment, owned by private equity firm Montagu, could emerge as bidders for INKA, while BNP Paribas and State Street are mainly interested in HSBC’s custody business, this person added.

HSBC, State Street, BNP Paribas, Caceis and Montagu declined to comment.

INKA is one of the biggest fund administrators in the industry with around 400 billion euros of assets under administration at the end of 2023. With more than 51 billion euros in net cash inflows in 2023, INKA has a market share of almost 22%, according to HSBC’s website.

The custody business could also be attractive for potential buyers like Caceis, a French asset servicing bank with a presence in Germany, because it is already active in this space, the second source said.

Caceis has 4.7 trillion euros of assets under custody and 3.3 trillion euros of assets under administration, according to fiscal year 2023 figures available on its website.

($1 = 0.9346 euros)

(Reporting by Emma-Victoria Farr and Amy-Jo Crowley, editing by Anousha Sakoui and Susan Fenton)