On 17th October, CACEIS and Royal Bank of Canada (RBC) announced they had signed a memorandum of understanding for the acquisition by CACEIS of the European asset servicing business of RBC Investor Services. This transaction, which is subject to all the usual regulatory and antitrust approvals, would enable CACEIS to consolidate its position as a leading asset servicing group in Europe with global reach.
What Will BE the scope of the proposed transaction with RBC?
The scope of the deal includes asset custody services and associated foreign exchange transactions, fund administration, transfer agency services, middle office services, securities lending and private equity services.
The transaction would involve the transfer to CACEIS of approximately 2,400 staff from RBC Investor Services based mainly in Luxembourg and Malaysia, but also in Belgium, France, Ireland, Switzerland, the United Kingdom and the Channel Islands.
The proposed acquisition includes RBC Investor Services’ operational centre in Malaysia, which has more than 1,000 staff members and presents itself as an excellent strategic fit for CACEIS’ existing structure. This high-quality centre of excellence will allow us to enhance our operational set up, in coordination with our current competence centres.
How does this major transaction fit into CACEIS’ strategy?
It’s a significant external growth operation for CACEIS that is perfectly in line with our 2025 Medium-Term Plan (MTP), unveiled last summer. Our MTP keeps the door open to selective acquisitions and with RBC, we seized the opportunity to take advantage of an excellent deal.
Should the deal conclude successfully, it will be a major transformative driver for CACEIS. Indeed, by absorbing the European asset servicing business of RBC Investor Services, CACEIS will benefit from an even broader international business culture with a stronger market share in a number of key regions. The deal will cover the entire value chain and enable CACEIS to offer an enhanced set of services to its existing and prospective clients.
The acquisition is designed to considerably strengthen our competitive position, especially in Luxembourg, Ireland and the United Kingdom, by building on the business reputation that RBC Investor Services enjoys with European and international clients.
We stand to benefit from the recognised expertise of RBC Investor Services’ staff who have extensive knowledge of the needs of international investors, particularly with regard to fund distribution and private equity services.
Once the acquisition is concluded, our group will have a total of over 6,000 staff members working across 16 countries.
With this major business deal, CACEIS will further strengthen its position as a leading asset servicing group in Europe, becoming the region’s no.1 fund administration player with some €3.5 trillion in assets under administration. In terms of custody, we will rank among the top three providers looking after around €4.8 trillion in assets. For transfer agency services and fund distribution, we will occupy the number two spot.
What benefits will this transaction bring to CACEIS and RBC clients?
We are convinced that this operation provides an excellent opportunity to further raise the levels of service satisfaction for CACEIS and RBC clients. In addition to the expanded range of services, the extended geographic scope and the additional expertise that this activity merger will bring them, RBC and CACEIS clients alike benefit from all the advantages of working with an asset servicing partner with shareholders that are committed to the business, have strong financials and a clearly stated strategy in terms of sustainability. CACEIS is fully committed to the business over the long-term, and is keen to keep on improving and provide all our clients with the best possible servicing.
I want to reassure all our clients that this integration should take place under positive conditions because the businesses dovetail well in terms of geographic presence and product range. We have already identified numerous synergies, such as the optimisation of our IT platforms, which will permit us to better meet the needs of our varied clientele.
We are confident in our ability to integrate staff and business operations. CACEIS benefitted from solid experience in staff onboarding and business integration ever since it was founded. We are a melting pot: we have built ourselves up by combining companies or asset servicing divisions, while respecting each other’s culture – this is our true strength. The more recent acquisition of KAS Bank in 2019 and the integration of Santander Securities Services (S3) in 2020 are tangible proof of CACEIS’ spirit of partnership, our ability to successfully integrate operational platforms, and our desire to grow to become a key partner for our clients.
The transaction is scheduled to be completed by mid-2023, subject to obtaining all the necessary authorisations. Then we will be delighted to welcome RBC staff members to CACEIS and we are fully convinced that together, we will be capable of providing the best possible servicing for all our clients.