GERMANY - Allianz Global Investors (AGI) has agreed to sell a 51% stake in fund administration arm Fonds Depotbank to UK securities clearer Xchanging, for an undisclosed sum.
Xchanging will take operative control of Fonds Depotbank once the deal, which is subject to regulatory approval, is closed by November 1.

Based in Hof, Bavaria, the AGI arm provides back-office administration for €19.2bn worth of mutual funds and has 1.3m client accounts.

Both parties stressed, however, the deal was part of a strategic partnership which would see Fonds Depotbank strengthen its efforts to generate third-party business from asset managers, financial advisers and broker pools.

A spokesman for AGI in Frankfurt said the deal should not be interpreted as the German asset manager's exit from back-office fund administration.

"We have formed a long-term strategic partnership with Xchanging and there are no plans to sell our remaining 49% stake," he said.

Xchanging said the deal marked its initial entry into the "growth market that is European asset management".

Based in London, Xchanging entered the German market in 2004 when it acquired a majority stake in the securities clearing unit of Deutsche Bank, known at the time as the European Transaction Bank (etb).

Xchanging then renamed etb Xchanging Transaction Bank GmbH in July 2006. etb is believed to have a 12% share of the German market for securities transactions.