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Citi fund admin unit sells for $425m

The bank’s alternative investor services business has found a buyer in service provider giant SS&C.

Financial services provider SS&C Technologies has acquired Citigroup's Alternative Investor Services business, which includes private equity fund services and hedge fund services, for $425 million, according to a press release.

The entire operations of the alternatives fund admin business, which includes roughly 1,500 employees, will be transferred to SS&C. The transaction is expected to close in the first quarter of 2016, subject to approvals by relevant regulatory authorities.

“This acquisition is solidly in line with SS&C's strategy of combining organic growth with select, high quality acquisitions,” commented SS&C chairman and chief executive Bill Stone in a statement. “We are excited about adding these talented employees and look forward to the ideas and passion they will bring to our organization.”

The deal marks the second major strategic buy by SS&C this year. Last month, the service provider sealed its purchase of rival Advent Software for approximately $2.63 billion. Through the acquisition, SS&C gained 4,300 clients, including asset managers, hedge funds and fund administrators.

The deal also comes a day after Citigroup agreed to pay nearly $180 million to settle charges from the US Securities and Exchange Commission, which claimed that two of the bank’s affiliates misled investors regarding the risks of two hedge funds that ultimately collapsed during the financial crisis.