Carve Out and Outsourcing of Securities Processing for Asset Management

In an effort to optimize operations, the asset management subsidiary of a leading German universal bank has decided to outsource securities processing functions. LKPU was engaged to oversee the carve-out and outsourcing process, ensuring a seamless transition and efficient operations.

• Conducted comprehensive due diligence, created a data room, and performed valuation exercises to assess the feasibility and value of outsourcing securities processing.
• Developed a robust business case, considering financial aspects, benefits, risks, and long-term viability of the outsourcing arrangement.
• Implemented ringfencing measures to separate the securities processing functions from the existing operations, ensuring data security and compliance with regulatory requirements.
• Developed a detailed transition plan, outlining the steps, resources, and timelines required for a smooth transfer of securities processing functions to the asset management subsidiary.
• Executed the transition plan, managing the handover of processes, systems, and responsibilities.
• Defined the services to be provided by the asset management subsidiary as the insourcing partner, establishing clear service level agreements (SLAs) and performance expectations.
• Designed test cases to validate the integration of securities processing functions with the asset management subsidiary’s operations.
• Conducted integration tests to ensure the seamless functioning and compatibility of systems and processes.
• Designed the architecture and reporting framework to support effective securities processing operations and enable timely and accurate reporting.

LKPU successfully managed the carve-out and outsourcing of securities processing functions for the asset management subsidiary, optimizing operations and enhancing efficiency. Our comprehensive approach encompassed due diligence, business case development, ringfencing implementation, smooth transition planning and execution, service definition, integration testing, and architecture and reporting. The outcome was a streamlined and effective securities processing operation, leveraging the specialized expertise and capabilities of the asset management subsidiary.