3i backs fund admin merger

3i-owned hedge fund administrator Fulcrum is merging with Butterfield Fund Services to form a combined platform worth $300m. Akshaya Bhargava, 3i’s former industrialist in residence and the current chief executive of Fulcrum, will take the helm at Butterfield Fulcrum Group.

Fulcrum Group, an administrator to the hedge fund and alternative asset management industries, is merging with Butterfield Fund Services, a fund administration services provider owned by Bermuda’s Butterfield Bank.

The joint entity, which the management claimed in a press release will rank among the top ten independent fund administrators in the world, is valued by the owners at around $300 million (€193 million).

3i’s US venture capital arm, 3i Growth Capital, invested $57 million for a minority stake in Fulcrum back in July 2007. As part of the new merger deal 3i is injecting a further $80 million.

Butterfield Bank will retain 40 percent of the combined entity, which will be known as Butterfield Fulcrum Group (BFG), with the remaining 60 percent split between 3i and BFG’s management.

Akshaya Bhargava, 3i’s industrialist in residence who was parachuted into Fulcrum as chief executive when 3i made its first investment in the company, will become BFG’s chief executive officer.

Bhargava

Before moving to 3i, Bhargava was chief executive officer of Progeon, a BPO services company which he grew from a start-up in Bangalore, India. The company now has a market capitalisation in excess of $30 billion trading under the name Infosys.

Jill Considine, current chairman of the Fulcrum Group, will chair the BFG Board.
 
The combined entity will be headquartered in Bermuda and have approximately 400 employees in 10 locations across 9 countries. The firm will have close to $100 billion in assets under administration.

3i director Bruce Keith ruled out the possibility of widespread job losses as the two companies merge. “It is possible people will be moved around as Fulcrum’s technologies are implemented,” Keith told PEO, “but overall headcount is unlikely to move significantly.”

3i has defied any talk of a slowdown in private equity investment activity and is having an active 2008. In July, PEO reported that the international firm had put a total of £775 million to work during the second quarter, an increase on the £702 million for the same period in 2007.