South African banking group Nedcor has sold off its offshore fund administration and management business in the Isle of Man to HSBC-owned Bank of Bermuda (IoM) for £2,55 million.
It will also receive a pre-sale dividend of £1,375 million, resulting in a net profit of about £1 million after costs.
Nedcor said the sale was part of its strategy of reviewing all non-core businesses within the group.
The business administers 50 funds with around £1.2 billion of assets under administration and employs 17 staff.
Andrew Lodge, managing director of Nedcor's asset management business in the Isle of Man, said after Nedcor bought BoE it was clear that BoE Fund Services would not remain a core offering of the group's international wealth management division. He said selling it was in the best interests of clients and staff.
'Nedcor continues to have a strong presence in the Isle of Man spanning fund management through NIB International Asset Management, an offshore fund supermarket, Nedcor International Fund Xchange, and private banking through Gerrard Private Bank. We will continue to be a major client of the BoE Fund Services business.'
Nedcor chief executive Tom Boardman had said Nedcor was going back to basics as a bank, not as an investment company, and would focus on its Southern African business. Since then, the group has sold London-based investment management unit Chiswell Associates, offshore private client wealth manager Stenham Group and Century City.
Following the acquisition of the Bank of Bermuda by HSBC in February this year, the Global Fund Services division has become the Alternative Fund Services arm of HSBC Securities Services. The combined business of BoE and HSBC's Alternative Fund Services in the Isle of Man will be the largest fund administrator in the Island.
Caroline Cornish, head of HSBC Securities Services in the IoM, said: 'Working closely with BoE's parent, Nedcor Wealth Management, and HSBC, we were able to complete the purchase very swiftly. We are experiencing rapid expansion in our business worldwide, and securing an established fund administration team together with a quality client base will contribute significantly to our continued success.'
Paul Smith, global head of HSBC's Alternative Fund Services, said: 'We have a strong team in the Isle of Man and a good client base. I am delighted that the BoE acquisition will add strength to both. One of the great attractions of this deal was the opportunity to acquire the high quality of staff that BoE brings to us. Being part of one of the world's largest financial institutions enables us to maximise the services offered by other parts of the HSBC group to the benefit of all our clients.'
Alan Smith, global head of marketing and strategy for HSBC's Alternative Fund Services, said: 'We have been looking at BoE's offshore fund administration and management business for some time and this deal further demonstrates HSBC's commitment to our core business and to the Isle of Man as a centre for fund administration.'
Donald Gelling, chairman of Isle of Man Finance, said the deal 'very clearly demonstrates the attractions of the Isle of Man as a centre for funds business'.
Mr Gelling added: 'The Treasury Minister in his budget speech in February 2003, following industry consultation, announced a series of initiatives to stimulate the funds industry and only some 18 months later we have seen significant rewards. In the last quarter alone, funds under administration in the Isle of Man have increased by 20 per cent.'
Source: Isle Of Man Online
