State Street Corporation (NYSE: STT), announced today that it
has completed its acquisition of GE Asset Management (GEAM) from GE
(NYSE: GE). The transaction provides multiple benefits to State
Street Global Advisors (SSGA) and its clients, including the
addition of new alternatives capabilities, strengthening
fundamental equity and active fixed income teams, and establishing
SSGA as a leading provider of outsourced chief investment officer
(OCIO) services.
In connection with the closing, SSGA received client consents to
transition the management of approximately 99% of GEAM’s assets
under management (more than $100 billion as of March 31, 2016) and
approximately 270 former GEAM employees joined the SSGA team.
“This transaction is a key step in our strategy to invest in
higher growth and return businesses,” said Jay Hooley, chairman and
chief executive officer of State Street Corporation. “It is also an
important part of SSGA’s continued evolution as a premier provider
of solutions to clients.”
“GEAM’s asset management capabilities—in areas spanning active
management, alternatives and OCIO mandates—are not only
complementary to our own, but will also strengthen the range of
SSGA’s offerings in the marketplace,” said Ron O’Hanley, president
and chief executive officer of SSGA. “In this lower-for-longer
return environment, we think it is more important than ever for us
to develop a broad investment toolkit and solutions mindset to help
our clients achieve their investment goals.”
About State Street Corporation
State Street Corporation (NYSE: STT) is one of the world's
leading providers of financial services to institutional investors,
including investment servicing, investment management and
investment research and trading. With $27 trillion in assets under
custody and administration and $2 trillion* in assets under
management as of March 31, 2016, State Street operates in more than
100 geographic markets worldwide, including the US, Canada, Europe,
the Middle East and Asia. For more information, visit State
Street’s website at www.statestreet.com.
* Assets under management include approximately $33 billion as
of March 31, 2016, for which State Street Global Markets, LLC, an
affiliate of SSGA, serves as the distribution agent.
About State Street Global Advisors
For nearly four decades, State Street Global Advisors has been
committed to helping our clients, and those who rely on them,
achieve financial security. We partner with many of the world’s
largest, most sophisticated investors and financial intermediaries
to help them reach their goals through a rigorous, research-driven
investment process spanning both indexing and active disciplines.
With trillions in assets, our scale and global reach offer clients
access to markets, geographies and asset classes, and allow us to
deliver thoughtful insights and innovative solutions.
State Street Global Advisors is the investment management arm of
State Street Corporation.
Forward-Looking Statements
This news release contains forward-looking statements as defined
by United States securities laws, including statements relating to
our goals and expectations regarding our business and strategies,
including, without limitation, our strategy to invest in higher
growth and return businesses, SSGA’s continued evolution as a
premier provider of solutions to clients and the additional asset
management capabilities and other benefits of the acquisition of
GEAM. Forward-looking statements are often, but not always,
identified by such forward-looking terminology as “will,”
“strategy,” “expect,” "priority," “objective,” “intend,” “plan,”
“forecast,” “believe,” “anticipate,” “estimate,” “seek,” “may,”
“trend,” “target,” “outlook” and “goal,” or similar statements or
variations of such terms. These statements are not guarantees of
future performance, are inherently uncertain, are based on current
assumptions that are difficult to predict and involve a number of
risks and uncertainties. Therefore, actual outcomes and results may
differ materially from what is expressed in those statements, and
those statements should not be relied upon as representing our
expectations or beliefs as of any date subsequent to July 1,
2016.
Important factors that may affect future results and outcomes
include, but are not limited to:
- the financial strength and continuing
viability of the counterparties with which we or our clients do
business and to which we have investment, credit or financial
exposure, including, for example, the direct and indirect effects
on counterparties of the sovereign-debt risks in the U.S., Europe
and other regions;
- increases in the volatility of, or
declines in the level of, our net interest revenue, changes in the
composition or valuation of the assets recorded in our consolidated
statement of condition (and our ability to measure the fair value
of investment securities) and the possibility that we may change
the manner in which we fund those assets;
- the liquidity of the U.S. and
international securities markets, particularly the markets for
fixed-income securities and inter-bank credits, and the liquidity
requirements of our clients;
- the level and volatility of interest
rates, the valuation of the U.S. dollar relative to other
currencies in which we record revenue or accrue expenses and the
performance and volatility of securities, credit, currency and
other markets in the U.S. and internationally;
- the credit quality, credit-agency
ratings and fair values of the securities in our investment
securities portfolio, a deterioration or downgrade of which could
lead to other-than-temporary impairment of the respective
securities and the recognition of an impairment loss in our
consolidated statement of income;
- our ability to attract deposits and
other low-cost, short-term funding, our ability to manage levels of
such deposits and the relative portion of our deposits that are
determined to be operational under regulatory guidelines and our
ability to deploy deposits in a profitable manner consistent with
our liquidity requirements and risk profile;
- the manner and timing with which the
Federal Reserve and other U.S. and foreign regulators implement
changes to the regulatory framework applicable to our operations,
including implementation of the Dodd-Frank Act, the Basel III final
rule and European legislation (such as the Alternative Investment
Fund Managers Directive, Undertakings for Collective Investment in
Transferable Securities Directives and Markets in Financial
Instruments Directive II); among other consequences, these
regulatory changes impact the levels of regulatory capital we must
maintain, acceptable levels of credit exposure to third parties,
margin requirements applicable to derivatives, and restrictions on
banking and financial activities. In addition, our regulatory
posture and related expenses have been and will continue to be
affected by changes in regulatory expectations for global
systemically important financial institutions applicable to, among
other things, risk management, liquidity and capital planning and
compliance programs, and changes in governmental enforcement
approaches to perceived failures to comply with regulatory or legal
obligations;
- we may not successfully implement our
plans to address the deficiencies jointly identified by the Federal
Reserve and the FDIC in April 2016 with respect to our 2015
resolution plan, or those plans may not be considered to be
sufficient by the Federal Reserve and the FDIC, due to a number of
factors, including, but not limited to challenges we may experience
in interpreting and addressing regulatory expectations, failure to
implement remediation in a timely manner, the complexities of
development of a comprehensive plan to resolve a global custodial
bank and related costs and dependencies. If we fail to meet
regulatory expectations to the satisfaction of the Federal Reserve
and the FDIC in our resolution plan submission due on October 1,
2016 or in any future submission, we could be subject to more
stringent capital, leverage or liquidity requirements, or
restrictions on our growth, activities or operations;
- adverse changes in the regulatory
ratios that we are required or will be required to meet, whether
arising under the Dodd-Frank Act or the Basel III final rule, or
due to changes in regulatory positions, practices or regulations in
jurisdictions in which we engage in banking activities, including
changes in internal or external data, formulae, models, assumptions
or other advanced systems used in the calculation of our capital
ratios that cause changes in those ratios as they are measured from
period to period;
- increasing requirements to obtain the
prior approval of the Federal Reserve or our other U.S. and
non-U.S. regulators for the use, allocation or distribution of our
capital or other specific capital actions or programs, including
acquisitions, dividends and stock purchases, without which our
growth plans, distributions to shareholders, share repurchase
programs or other capital initiatives may be restricted;
- changes in law or regulation, or the
enforcement of law or regulation, that may adversely affect our
business activities or those of our clients or our counterparties,
and the products or services that we sell, including additional or
increased taxes or assessments thereon, capital adequacy
requirements, margin requirements and changes that expose us to
risks related to the adequacy of our controls or compliance
programs;
- financial market disruptions or
economic recession, whether in the U.S., Europe, Asia or other
regions;
- our ability to develop and execute
State Street Beacon, our multi-year transformation program to
create cost efficiencies and to fully digitize our business to
support the development of new solutions and capabilities for our
clients, any failure of which, in whole or in part, may among other
things, reduce our competitive position, diminish the
cost-effectiveness of our systems and processes or provide an
insufficient return on our associated investment;
- our ability to promote a strong culture
of risk management, operating controls, compliance oversight and
governance that meet our expectations and those of our clients and
our regulators;
- the results of our review of our
billing practices, including additional amounts we may be required
to reimburse clients, as well as potential consequences of such
review, including damage to our client relationships and adverse
actions by governmental authorities;
- the results of, and costs associated
with, governmental or regulatory inquiries and investigations,
litigation and similar claims, disputes, or civil or criminal
proceedings;
- the potential for losses arising from
our investments in sponsored investment funds;
- the possibility that our clients will
incur substantial losses in investment pools for which we act as
agent, and the possibility of significant reductions in the
liquidity or valuation of assets underlying those pools;
- our ability to anticipate and manage
the level and timing of redemptions and withdrawals from our
collateral pools and other collective investment products;
- the credit agency ratings of our debt
and depositary obligations and investor and client perceptions of
our financial strength;
- adverse publicity, whether specific to
State Street or regarding other industry participants or
industry-wide factors, or other reputational harm;
- our ability to control operational
risks, data security breach risks and outsourcing risks, our
ability to protect our intellectual property rights, the
possibility of errors in the quantitative models we use to manage
our business and the possibility that our controls will prove
insufficient, fail or be circumvented;
- our ability to expand our use of
technology to enhance the efficiency, accuracy and reliability of
our operations and our dependencies on information technology and
our ability to control related risks, including cyber-crime and
other threats to our information technology infrastructure and
systems and their effective operation both independently and with
external systems, and complexities and costs of protecting the
security of our systems and data;
- our ability to grow revenue, manage
expenses, attract and retain highly skilled people and raise the
capital necessary to achieve our business goals and comply with
regulatory requirements and expectations;
- changes or potential changes to the
competitive environment, including changes due to regulatory and
technological changes, the effects of industry consolidation and
perceptions of State Street as a suitable service provider or
counterparty;
- changes or potential changes in the
amount of compensation we receive from clients for our services,
and the mix of services provided by us that clients choose;
- our ability to complete acquisitions,
joint ventures and divestitures, including the ability to obtain
regulatory approvals, the ability to arrange financing as required
and the ability to satisfy closing conditions;
- the risks that our acquired businesses
and joint ventures will not achieve their anticipated financial and
operational benefits or will not be integrated successfully, or
that the integration will take longer than anticipated, that
expected synergies will not be achieved or unexpected negative
synergies or liabilities will be experienced, that client and
deposit retention goals will not be met, that other regulatory or
operational challenges will be experienced, and that disruptions
from the transaction will harm our relationships with our clients,
our employees or regulators;
- our ability to recognize emerging needs
of our clients and to develop products that are responsive to such
trends and profitable to us, the performance of and demand for the
products and services we offer, and the potential for new products
and services to impose additional costs on us and expose us to
increased operational risk;
- changes in accounting standards and
practices; and
- changes in tax legislation and in the
interpretation of existing tax laws by U.S. and non-U.S. tax
authorities that affect the amount of taxes due.
Other important factors that could cause actual results to
differ materially from those indicated by any forward-looking
statements are set forth in our 2015 Annual Report on Form 10-K and
our subsequent SEC filings. We encourage investors to read these
filings, particularly the sections on risk factors, for additional
information with respect to any forward-looking statements and
prior to making any investment decision. The forward-looking
statements contained in this news release speak only as of the date
hereof, July 1, 2016, and we do not undertake efforts to revise
those forward-looking statements to reflect events after that
date.
State Street Corporation, One Lincoln Street, Boston, MA
02111-2900© 2016 State Street Corporation - All Rights
ReservedINST-6771Expiration Date - 06/30/2017
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State Street CorporationAnthony Ostler, +1 617-664-3477orCarolyn
Cichon, +1 617-664-8672
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