HSBC Securities Services Acquires Liberty Ermitage Fund Administration Business In Luxembourg

Hamilton, Bermuda: 10 October, 2006 -- HSBC Securities Services (Luxembourg) S.A. ('HSSL'), a wholly owned subsidiary of HSBC Bank plc, has acquired the business of Liberty Ermitage (Luxembourg) S.A. ('LELSA'), the Luxembourg based fund administration business of Liberty Group. Under the agreement Liberty Group Jersey Holdings Limited will be paid over a three year period, subject to agreed thresholds and up to a maximum of ‚¬8 million.

LELSA currently employs 25 staff, administers over 20 funds and, at 31 July 2006, had assets under administration of more than US$4.5 billion.

HSSL is one of the largest administrators and custodians of alternative funds in Luxembourg. With 15 years' experience and in excess of US$35 billion in assets under administration as at 31 July 2006, the company offers a full range of fund administration and custody services to alternative and traditional fund clients.

The combined business of HSSL and LELSA will reach almost US$40 billion in assets under administration and will employ over 250 staff.

Germain Birgen, managing director and head of HSBC Securities Services in Luxembourg, said: "We are acquiring a highly experienced team that will help us meet the challenges of our rapidly growing business in Luxembourg. The acquisition cements our relationship with two key clients Liberty Group and Ermitage Group - which is one of the largest offshore alternative asset management operations in Europe."

Mark Hucker, Chief Operating Officer of Ermitage Group in Jersey, said: "To be successful in the fund services business requires a global presence and state-of-the-art technology. In this environment, and given our focus on building out our core fund management activities, we believe that the sale of LELSA to HSBC is an excellent option for staff, our fund managers and third party clients. This is an opportunity to strengthen the partnership Ermitage enjoys with HSBC."