SWITZERLAND - State Street Global Advisors (SSgA) has signed an agreement transferring its Swiss institutional fixed income business to banking group SYZ & Co as part of its review of its European business operations.
The transaction includes the transfer of assets under management valued at several billions of Swiss francs, while the existing Zurich-based three-man asset management team, headed by Daniel Hannemann, alongside Martin Oetiker and Luzius Kuster, will also join SYZ Asset Management, the banking group's institutional asset management arm.
In a statement, SYZ said the clients affected by the transfer would mainly be domestic Swiss public pension funds or large private corporation pension schemes invested in Swiss fixed income products through segregated mandates and three Swiss-domiciled funds targeted at institutional investors.
Ricardo Payro, head of corporate communications at SYZ, said the acquisition would provide the bank with diversification in its institutional client base, which is currently non-Swiss, while also broadening the scope of the mandates the bank can offer to clients.
That said, the exact value of the assets being transferred will depend on individual clients approving the transfer, albeit SYZ claimed it was confident this would be the case as it has the full support of SSgA and there is "practically no difference" in the contracts and the supporting tools, brokers and custodians except for the change of name. So there would be "minimal disruption" to pension funds.
The sale of the business follows a review by SSgA of its activities in an effort to "define a new operational model in Europe".
Rüdiger Zeppenfeld, managing director of SSgA in Zurich, said: "This transaction has our full support, and is endorsed as well by the teams concerned. We encourage our clients to accept the proposed change as it allows for continuity with the same approach and asset management team, within a solid organisation which understands the complex needs of institutional investors."
A spokeswoman for SSgA said the transaction "reflects SSgA's continued efforts to streamline European investment management operations to best support future growth and to ensure the greatest efficiency in our approach to serving clients with excellence".
However, State Street said the agreement relates only to the Swiss fixed income and cash portfolios and the related portfolios, so the client services, sales, product development and distribution teams in Zurich will continue to provide clients in Switzerland with the same level of service, while client portfolios - with the exception of Swiss bond portfolios - will "continue to be managed by our investment teams in London, Paris and Boston".
She said: "While investment operations are becoming more centralised, we continue to service clients locally with on-the-ground sales and client service staff in key markets across Europe. SSgA remains committed to serving the Swiss investment community where it has been an important part of the institutional investment landscape for more than a decade."
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