Mitsubishi UFJ Financial Group Buys Hedge Fund Butterfield Fulcrum

Japan's biggest bank holding and financial services company Mitsubishi UFJ Financial Group (MUFG) has snapped up one of the world's largest hedge fund administrators in a bid to expand its business globally.

MUFG will buy Butterfield Fulcrum's business, which has more than $100bn (€75.6bn, £64.5bn) of client assets, across 850 funds.

However, the financial terms of the deal were not disclosed.

Bermuda-based Butterfield Fulcrum has about 325 employees in its seven offices in six countries and provides fund administration to hedge funds, fund of funds, family offices and private equity funds.

"The acquisition is in line with our group's strategy to expand asset management and administration businesses not only in Japan but overseas. It will bring us several billions of yen of profit annually," said Ayumu Tominaga of Mitsubishi UFJ Trust, refusing to reveal the buyout price.

MUFG', one of the main companies of Japan's Mitsubishi Group, is the world's fifth largest bank holding company having assets of approximately $2.6tn.

"We will be leveraging MUFG's global brand and presence along with Butterfield Fulcrum's industry leading technology and talent to expand into new geographies and client opportunities," said Tim Calveley, deputy chief executive officer of Butterfield Fulcrum.

The move by MUFG is expected to increase its fee revenues significantly. In addition, the business platform of Butterfield Fulcrum will help the company to offer its wider range of products to a larger base of international customers.

"Hedge fund administration generates higher fees than the comparable business for mutual funds and is a growth area given the new and more onerous filing requirements. Post-merger they will be adding banking, custody, trust, foreign-exchange and securities-lending services." said Makarim Salman, an analyst at Jefferies Group in Tokyo.

Ropes & Gray provided the legal counsel while Evercore Partners was the chief financial advisor of the transaction.

Earlier in April, the financial group announced to purchase $3.7bn of US real estate loan assets to advance its commercial lending from Deutscheh Bank through UnionBanCal, its San Francisco based bank holding company.