Fund industry executives Glenn Henderson and Tim Calveley have partnered with the $2.6 billion private equity firm BV Investment Partners to acquire fund administrator Butterfield Fulcrum Group, taking over from current investors including 3i Group PLC (III.LN) and Carlyle Group L.P.

Terms of the transaction weren't disclosed. Butterfield Fulcrum, which serves private equity and hedge fund clients, is now also backed by Butterfield Bank and Toronto-based Canadian Imperial Bank of Commerce (CM, CM.T).

The deal will bring Henderson and Calveley full circle to the company they helped create by merging Fulcrum Group with Butterfield Fund Services in the summer of 2008.

Henderson was Fulcrum's former chief executive and is still a shareholder in Butterfield Fulcrum. Calveley was Fulcrum and Butterfield Fulcrum's chief financial officer and chief risk officer until 2008.

The two left and acquired FORS Ltd., an independent provider of family office and wealth management reporting administrative services, in 2009.

"Although the two businesses have different target clients, they share a lot of similarities and can leverage on each other's contacts to help grow," Henderson told Dow Jones Newswires. "Family offices have become extremely influential in terms of asset allocations, hedge fund seeding and the setting up of funds of hedge funds."

The deal is expected to close in the first quarter. After that, Butterfield Fulcrum and FORS will be housed under a new Bermuda-headquartered parent company, but the two companies will operate as separate businesses.

Henderson will take on the roles of chief executive for both the parent company and Butterfield Fulcrum. Calveley will be chief operating officer of the parent company.

"The absolute focus of Butterfield Fulcrum will be on being a full-service front-, middle- and back-office service provider to our existing clients, helping them with rolling out new funds and new products," Henderson said.

Butterfield Fulcrum went through a series of changes since the merger more than two years ago. Chief Executive Akshaya Bhargarva was replaced by Michael Clark, a former president of Fidelity Investments' institutional products group, to reflect the firm's revised focus on the U.S. fund industry. Clark, who told Dow Jones Newswires last year that the fund administrator is looking to expand via acquisitions and build a managed accounts platform, won't stay on after the acquisition.

"Butterfield Fulcrum is not looking at merging or acquiring. I think delivering outstanding client service to existing clients is the best way to win new clients," Henderson said. "We will not have a managed accounts business, as we have no interest in competing with our hedge fund clients who have a managed account platform."

Butterfield Fulcrum has more than $70 billion assets under administration and serves more than 700 funds, while FORS's clients have assets in excess of $25 billion.

-By Amy Or, Dow Jones Newswires; +1 212 416 3142; amy.or@dowjones.com
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