(Bloomberg) -- BNP Paribas SA is taking over part of HSBC Holdings Plc’s business that caters to hedge funds as the French lender looks to deepen its business with those asset managers. 

BNP’s securities services unit signed an exclusive agreement to take over HSBC’s hedge funds administration business, according to a statement Tuesday. The agreement allows the 25 institutional clients affected by HSBC’s decision to shut down the business to transfer their hedge fund administration requirements to BNP. 

“While HSBC’s securities services business has taken the decision to exit hedge fund administration services, the alternatives sector continues to be a focus of growth for us, including private assets fund administration and prime services, both of which have seen a strong performance over the course of the year,” HSBC said in a separate emailed statement.

BNP is expected to hire some HSBC staff as part of the deal. In recent years, the French banking giant has beefed up its operations dealing with hedge funds even as peers retreated from the profitable yet risky business. The lender took over the prime brokerage business of Deutsche Bank AG and later entered into a referral agreement with embattled Credit Suisse to gain access to its hedge fund clients.

“The sector of liquid alternative assets and of hedge funds is a focus point for BNP Paribas,” Philippe Benoit, head of strategic business development and transformation for BNP’s securities services unit, said in the statement.

HSBC, for its part, has been shedding businesses as the company has looked to steer billions of dollars in capital toward Asia. Earlier this month, it agreed to sell its retail and business banking units in Mauritius to Absa Group Ltd. It previously agreed to sell its Canadian business to Royal Bank of Canada for C$13.5 billion ($9.9 billion), and announced in 2021 it would exit its US domestic mass-market retail banking business. 

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