The acquisition is subject to regulatory and fund board approvals, and other customary closing conditions. It is expected to close in the second half of 2017.
The deal expands Northern Trust’s presence in Luxembourg, where it has been active since 2004. It will be the bank’s first venture into local fund administration in Switzerland, where it currently offers investment management and asset servicing solutions.
UBS’s current relationship management teams will remain in place, and UBS will continue to provide its management, white-labelling and representative services. The Swiss fund administration unit will be integrated into Northern Trust’s global fund services business.
Toby Glaysher, international head of Northern Trust Global Fund Services, said: “The strong client franchise, together with the geographic footprint of the business in Luxembourg and Switzerland, make this an excellent strategic fit for our growing business in the region.”
He added: “Like Northern Trust, UBS Asset Management is committed to excellence, innovation and superior client service. These shared values will enable us to continue to differentiate ourselves with our clients, strengthen our position as a leader in these markets and position us for long-term global growth.”
Ulrich Koerner, president of UBS Asset Management, said: “We continue to drive the transformation of our platform to further increase efficiency and effectiveness. This move will enable us to further focus our efforts on helping clients address their global investment challenges, while ensuring their fund administration needs continue to be well served.”
"We believe the transaction and ongoing collaboration with Northern Trust is a compelling proposition for our clients."
UBS Asset Management’s Luxembourg and Switzerland fund administration businesses had $413 billion in assets under administration as of 31 December 2016.