Clearstream’s parent firm, Deutsche Börse Group, has doubled down on data management and regulatory reporting services for investment firms with its of Kneip Communications. Bob Kneip will leave the eponymous fund data firm he founded nearly three decades ago, but planned the deal in order to keep the Kneip name in the marketplace, he told Delano.
Deutsche Börse announced on Monday that it would acquire 100% of Kneip, the Luxembourg-based fund data outfit. Founded in 1993, Kneip “manages investor disclosure and data publication for more than 10,000 funds in over 40 countries”, serving “over 30%” of EU-based investment funds ISINs, the unique international securities identification number that identifies each security globally.” The transaction is expected to be completed by the end of March this year, the firms on 28 March.
, founder and vice chairman of Kneip Communications “will step down as of the 1 April,” a company spokesman told Delano on 29 March. “Kneip’s executive leadership team remains in place”. Kneip CEO will report to , head of investment fund services at Deutsche Börse Group, the spokesman said.
Kneip and Seyll took time to answer some questions from Delano about the acquisition on Tuesday.
Will Kneip sit inside the Clearstream Fund Center or remain a separate operation?
Philippe Seyll said: “No, Kneip will continue to be managed as an independent company in Luxembourg. As a leading fund data manager, Kneip will sit within Deutsche Börse Group alongside its Investment Fund Services” unit, which is principally Clearstream. Seyll stated that “Kneip will become part of the ecosystem within Deutsche Börse Group, significantly enhancing our existing fund services offering as well as our data business.”
What changes will integrating Kneip have on Clearstream and Deutsche Börse’s operations, technology ecosystem and business strategy?
“Kneip will add a new key growth pillar complementing the strong fund services offering of custody and distribution services,” according to Seyll. “We envision an extension of the current fund data services offered by Deutsche Börse Group. The focus will be on significantly simplifying the process of data management and services for asset managers, fund distributors and other market participants across the fund ecosystem, such as global custodians and broker dealers. Deutsche Börse Group is acquiring Kneip with a view to invest in technology, processes and people.”
Is Fundsquare more of a competitor or more of a potential partner for you now?
“Our understanding is, that after the acquisition of Fundsquare [by FE fundinfo], their focus is primarily on regulatory services,” Seyll told Delano. “With the acquisition of Kneip, we are bringing together aspects of fund data services to sit alongside and complement our existing fund data services, to offer an extended range of services for asset managers and market players. Our ambition is to build an ecosystem where asset managers will source all services they need to commercialise their funds. The distributors will be able to benefit from improvements by offering fund execution, fund distribution and data related services under one roof.”
Will Kneip, based in Bertrange, consolidate its offices with Clearstream, which is located in Kirchberg?
“Kneip will continue to operate out of its Luxembourg office and will be able to further scale the business,” Bob Kneip said.
Any change to the Kneip brand name?
Bob Kneip replied: “Kneip will continue to operate under its own naming and branding. Kneip will continue to be managed as an independent company. The acquisition opens a new chapter in the Kneip journey. I wanted the Kneip name to remain in the marketplace and continue to shine nationally and internationally. With Deutsche Börse, Kneip is powered to scale the business and boost value to clients.”
Does Clearstream or Deutsche Börse Group have other acquisitions in sight?
The company would not tip its hand on any acquisition targets. However, further deals could be possible. Seyll commented: “Deutsche Börse Group considers its data business as well as its fund services as key focus areas for future growth. We have a clear intention to further invest both organically and through future acquisitions, building on our existing strong market position and relationships. High-quality data is a strategic competitive advantage and will allow us to develop innovative solutions for the funds business to even better support our clients.”
What is the value of the transaction?
The company declined to comment on the value of the deal. Seyll noted that “Deutsche Börse will acquire 100% of Kneip” but explained “that we have jointly decided on not disclosing any further terms of this transaction.”