As published in Delano Finance. Written by Aaron Grunwald image by Mike Zenari.
Apex Group’s acquisition of Sanne, which recently closed, “catapults” the combined company into the top 3 fund service providers in Luxembourg, the firm’s Pierre Weimerskirch said in an interview. And Apex plans to grow even bigger, with further deals and hiring more staff on the cards.
Privately held Apex Group closed last month on its £1.51bn takeover of its then-listed rival Sanne, which was announced in August 2021. The combined entity has roughly $3trn in assets under administration or management globally, with $550bn of that based in Luxembourg.
Prior to the purchase, Sanne had 250 employees in the grand duchy and 2,500 in total. Following the transaction, Apex Group now has 10,000 staff worldwide, including 1,250 in Luxembourg.
The deal “catapults Apex into the Premier League” in the industry, Pierre Weimerskirch, regional head, Luxembourg at Apex Group, said in an interview. “Now we can play with the top service providers in the asset management and fund servicing space.”
When the dust settles, “I think we’ll be among the top three service providers in Luxembourg when it comes to asset management and funds servicing,” Weimerskirch said. “It’s really a different game.” Counting Apex’s recently announced acquisition of Maitland, which is expected to close later this year, on the fund “admin side alone, we should be close to 500 people, which brings us to different depths of servicing.”
What “differentiates us from the other big guys, which are mainly banking institutions, is really that we are a hub of single service solutions. So, the depth and breadth of services provided by the new Apex Group is quite, quite broad and deep.” He cited as examples the “very nice capital markets platform” that Apex got when it bought Sanne, while Sanne was not able to provide custody and other banking services until it joined Apex.
Weimerskirch was previously a managing director at Sanne in Luxembourg since its takeover, in 2017, of Luxembourg Investment Solutions, which Weimerskirch co-founded.
While the company is shifting towards bigger clients, it plans to keep a selection of smaller and midsized firms on its roster. “Having 80 offices worldwide, we can service global asset managers, we have a range of fund platforms in different jurisdictions,” he argued. “So I think that definitely makes us much more interesting for larger asset managers.”
At the same time, “with the combination of Apex and Sanne here in Luxembourg, out of 1,250 [employees], we’re going to have at least 300 German speaking people [on staff]. So that also allows us to really focus on Germany and still cater for small or medium sized asset manager clients. But, of course, these clients need to have a minimum size. I think that’s true for everybody. I mean, you have more or less the same work for a $50m client and for a $200m client.”
In parallel, “we have to believe that these are growth clients,” he said. “From time to time, you have to make a bet” on smaller firms. Even the private market behemoth Apollo, which has $513bn in assets under management, started small at some point, he observed.
Weimerskirch did not share any specific future tie-up plans, but did say of Apex CEO Peter Hughes that “I’m pretty sure he’s busy identifying new companies to be acquired.” The aim is not to bulk up for size’s sake. Rather, any future deal needs to be “about broadening services” or a geographic expansion. “I’m pretty sure, as I said, there will be additional acquisitions.”
In Luxembourg, the company has about 130 open positions, with recruitment continuing. “The acquisition and merger is not about becoming more efficient and downsizing in terms of staff,” Weimerskirch stated during the interview. “We want to grow.... this means that we want to hire, need to hire, new people.”