Clearstream plans to cross-sell its newly acquired fund network Clearstream Fund Centre to the long list of fund execution clients on its Vestima platform, with a focus on key fund centres in the Asia-Pacific, its chief executive has said.

Bernard Tancré, chief executive officer of Clearstream Fund Centre, was speaking to Global Investor after the Deutsche Boerse-owned post-trade firm paid on Thursday last week CHF 390 million (£308 million) for the 49% of the fund network it did not already own.

The 100% ownership of Clearstream Fund Centre effectively fires the starting pistol on the next phase of Clearstream’s fund distribution strategy which Tancré said will involve pitching the Fund Centre’s distribution capabilities to firms using the Clearstream Vestima fund execution hub.

Tancré said: “We want to cross-sell the new product and its capabilities to the distributors that we have on the Vestima platform. Currently, we have about €300 billion (£260 billion) under distribution in agreements with Clearstream Fund Centre, and we have about €3 trillion on the execution and custody side of the business. So, we have the opportunity to tap into the €3 trillion reservoir.”

Tancré said he wanted to increase dramatically the volumes of business passing through the platform by matching fund distributors to fund providers.

Clearstream chief executive Philippe Seyll said the acquisition of Clearstream Fund Centre was strategically important as it boosted the firm’s distribution assets to complement its already dominant position in fund execution with Vestima.

Tancré said an acquisition was preferable to organic growth because a deal significantly reduces time to market, underlining the strategic importance of fund distribution for Clearstream.

He added that the Zurich-based platform was attractive also because it sits at the heart of the one of the world’s most important fund markets.

“The acquisition of Fund Centre from UBS is key because the wealth management and private banking businesses are key in funds, and Switzerland is the back office to many of those firms that are actively growing.”

Europe is a key focus for the Fund Centre, with Tancré arguing that bundled execution and distribution services, and bundled prices should open up opportunities for Clearstream in “southern Europe”.

He said the fast-growing Asian funds markets are also an important opportunity.

Tancré said: “If you are looking at the financial markets, you see a lot of potential in the Asian regions because they are the fastest growing. We have Clearstream teams that we can leverage in Singapore and Hong Kong.”

He added: “If we look at the Pacific region, which is mostly Australia, we made an acquisition there a couple of years ago: Ausmaq, now Clearstream Australia. It focuses on the execution side though there is also significant data business there. We are also looking at that market for the distribution product. It is a market in transition, but we do see some demand for funds distribution services over there.”

Clearstream cut a deal in May 2019 to acquire Ausmaq Limited from Australia’s NAB, marking the European firm’s first move into Australia.

Seyll, chief executive officer of Clearstream Banking S.A., Luxembourg, said the acquisition of Fund Centre is an important step in realising the firm’s strategic objectives.

He told Global Investor: “Fund Centre is only one part of a broader strategy. We started the journey with our funds processing platform Vestima, which focuses on fund execution. We are today by far the largest fund execution provider/custodian with more than €3 trillion of assets. However, and this is the second part of our strategy, we were also looking to offer additional services such as fund distribution so we decided years ago to invest in that business.”

Seyll said Vestima and now Clearstream Fund Centre represent two pillars of a wider strategy that also involves using distributed ledger technology to streamline transfer agency services and drawing on Clearstream’s vast network of funds firms to develop data solutions.