JCRA Approves Mourant Takeover Of AIB Fund Administrators

by Robin Pilgrim, LawAndTax-News.com, London

05 May 2006

It has emerged that Mourant's proposed takeover of AIB Fund Administrators has been approved by the Jersey Competition Regulatory Authority.

The application for approval of the planned merger was lodged on 23 February, and the submission of comments with regard to the union was invited until 20 March 2006.

AIB Fund Administrators is a wholly owned subsidiary of AIB Worthytrust, which is part of AIB Bank (CI) Limited. AIBFA is the only fund administrator in Jersey which is totally focussed on hedge fund administration. It provides accounting and administration services to hedge fund managers based in the UK, Bermuda and Jersey and their funds, domiciled in Jersey and Bermuda.

Mourant, meanwhile, describes itself as a specialist professional services group serving international corporations and high net worth individuals. The group comprises 800 people in four business lines, serving an international client base. It operates from offices in Jersey, Guernsey, London, Luxembourg, Cayman, New York, Seattle and Dubai.

The Company has four main divisions including Mourant du Feu & Jeune, a law firm; Mourant Equity Compensation Solutions, specialising in employee share plan administration; Mourant Private Wealth; and Mourant International Finance Administration (‘MIFA’), the fund administration arm.

The JCRA was asked to determine if the acquisition would substantially lessen competition in Jersey or any part thereof. It did this by:

• Defining the affected relevant market(s);
• Assessing concentration levels;
• Assessing the ability of the merged entity to substantially lessen competition either unilaterally or in co-ordination with competitors;
• Assessing whether other market forces, such as entry of new competitors eliminate the risk of a substantial lessening of competition; and
• Assessing any pro-competitive effects or efficiencies that may result from the merger.

As a result of this analysis, the JCRA concluded that the acquisition of AIBFA by Mourant will not result in a substantial lessening of competition in Jersey.

The Authority explained that:

"The fact that there are some 40 other administrators of all funds serviced in Jersey indicates that there still will be a broad array of such services available to purchasers in Jersey after the proposed acquisition. Furthermore, the number of firms offering such services increases further if the relevant geographic market is defined globally and not restricted to Jersey."

It continued:

"The proposed acquisition therefore appears unlikely to harm competition, as it does not appear to materially reduce the choice of fund administration services available in Jersey."

"Accordingly, the JCRA has concluded that the proposed acquisition is not likely to lessen competition substantially in Jersey or in any part of Jersey. The JCRA hereby approves the proposed acquisition under Article 22(1) of the Law."

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