State Street to Expand Alternative Investment Servicing Capabilities; Agrees to Acquire Leading European Administrator
December 01 2009 - 7:41AM
Business Wire
State Street Corporation (NYSE: STT), one of the world’s leading
providers of financial services to institutional investors,
announced today that it is expanding its global fund administration
and alternative servicing capabilities with an agreement to acquire
Mourant International Finance Administration (MIFA) in a cash
transaction. Pending regulatory approvals and other closing
conditions, the transaction is expected to close in the first
quarter of 2010.
State Street expects the transaction to be slightly accretive to
2010 earnings, excluding one-time costs.
Headquartered in Jersey in the Channel Islands with
approximately $170 billion in assets under administration and
approximately 650 employees in locations including Dublin,
Singapore and New York, MIFA is a leading provider of fund
administration services, particularly for alternative investments,
such as private equity, real estate and hedge funds.
The acquisition will strengthen State Street’s leadership in
global alternative asset servicing. The combined State Street and
MIFA businesses will rank No. 1 in alternative asset servicing
globally; No. 1 in private equity servicing globally; No. 1 in real
estate asset servicing globally and No. 2 in hedge fund servicing
globally, based on industry survey data1. With the acquisition,
State Street will also expand its reach in Europe and Asia and
broaden its capabilities for servicing investors’ growing real
estate administration requirements.
“As alternative asset classes have become more mainstream, our
institutional customers plan to continue to expand their use of
this asset class,” said Jay Hooley, president and chief operating
officer of State Street. “This acquisition will bring a wider and
more comprehensive product offering to our existing and new
customers and further develop our servicing footprint in Europe and
Asia where expanded capabilities, including enhanced real estate
servicing, better enables us to offer customers a full breadth of
solutions for all of their business needs.”
“Today’s announcement will allow MIFA to advance its position in
the alternative administration segment of the global fund
administration business, broaden its service capabilities and
expand to even more markets than before through State Street’s
global footprint,” added Nicola Palios, chief executive officer of
Mourant Limited.
State Street has significantly grown its capabilities in the
alternative asset servicing segment of the global fund
administration market over the last seven years. In 2002, the
company acquired International Fund Services (IFS), a leading
provider of hedge fund administration services and in 2007 State
Street significantly expanded its leadership in this market with
its acquisitions of both Investors Financial Services Corp. (IBT)
and Palmeri Fund Administrators (PFA).
“MIFA’s team of professionals will augment our existing
alternative and private equity operations,” added Jack Klinck,
executive vice president and global head of State Street’s
Alternative Investment Solutions team. “As a result, State Street
is well-positioned to continue to grow its position in the
increasingly important alternative asset segment.”
With more than $420 billion in alternative assets under
administration as of September 30, 2009, State Street’s Alternative
Investment Solutions (AIS) team provides a complete set of fund
accounting, fund administration, risk and credit services to hedge
fund managers and private equity managers and institutional
investors. State Street AIS has more than 2,400 employees with
locations in Boston, Ireland (Drogheda, Dublin, Naas), Toronto,
London, Tokyo and Sydney, New York and New Jersey. MIFA has
locations in the Channel Islands (Jersey, Guernsey), London,
Dublin, Luxembourg, Singapore, Hong Kong and New York.
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 $17.9 trillion in assets
under custody and administration and $1.7 trillion in assets under
management at September 30, 2009, State Street operates in 27
countries and more than 100 geographic markets worldwide. For more
information, visit State Street’s web site at
www.statestreet.com.
1 No. 1 in alternative fund servicing: Aggregating State
Street and MIFA data from HFM Week 12th Biannual Assets Under
Administration Survey, April 2009; ICFA Alternative Fund
Administration Survey April/May 2009; No. 1 in private equity
and real estate servicing: Aggregating State Street and MIFA
data from ICFA Alternative Fund Administration Survey April/May
2009; No. 1 in real estate servicing: Aggregating State
Street and MIFA data from ICFA Alternative Fund Administration
Survey April/May 2009; No. 2 in hedge fund servicing:
Aggregating State Street and MIFA data from HFM Week 12th Biannual
Assets Under Administration Survey, April 2009.
Forward-Looking Statements
This news announcement contains forward-looking statements as
defined by United States securities laws, including statements
about our agreement to acquire MIFA, the results and impact of that
acquisition and related rationales, as well as about our goals and
expectations regarding our business, financial condition, results
of operations and strategies, the financial and market outlook,
governmental and regulatory initiatives and developments, and the
business environment. 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 the date of
this release.
Important factors that may affect future results and outcomes
include, but are not limited to:
- the ability to obtain regulatory
approvals for the transaction in multiple jurisdictions and the
satisfaction of other closing conditions;
- the risks that businesses will
not be integrated successfully, or will take longer than
anticipated, that expected synergies will not be achieved or
unexpected dissynergies will be experienced, that customer
retention goals will not be met, and that disruptions from the
transaction will harm relationships with customers, employees and
regulators;
- financial market disruptions and
the economic recession, whether in the U.S. or internationally, and
monetary and other governmental actions designed to address such
disruptions and recession, including actions taken in the U.S. and
internationally to address the financial and economic disruptions
that began in 2007;
- increases in the potential
volatility of, or declines in the levels of, our net interest
revenue, changes in the composition of the assets on our
consolidated balance sheet and the possibility that we may be
required to change the manner in which we fund those assets;
- the financial strength and
continuing viability of the counterparties with which we or our
customers do business and to which we have investment, credit or
financial exposure;
- the liquidity of the U.S. and
international securities markets, particularly the markets for
fixed-income securities, and the liquidity requirements of our
customers;
- 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 income statement recognition of an impairment
loss;
- the maintenance of credit agency
ratings for our debt and depository obligations as well as the
level of credibility of credit agency ratings;
- the possibility of our customers
incurring substantial losses in investment pools where we act as
agent, and the possibility of further general reductions in the
valuation of assets;
- our ability to attract deposits
and other low-cost, short-term funding;
- potential changes to the
competitive environment, including changes due to the effects of
consolidation, extensive and changing government regulation and
perceptions of State Street as a suitable service provider or
counterparty;
- the level and volatility of
interest rates and the performance and volatility of securities,
credit, currency and other markets in the U.S. and
internationally;
- our ability to measure the fair
value of the investment securities on our consolidated balance
sheet;
- the results of litigation,
government investigations and similar disputes and, in particular,
the effect of current or potential proceedings concerning State
Street Global Advisors’, or SSgA’s, active fixed-income strategies
and other investment products;
- the enactment of legislation and
changes in regulation and enforcement that impact us and our
customers;
- adverse publicity or other
reputational harm;
- our ability to pursue
acquisitions, strategic alliances and divestures, finance future
business acquisitions and obtain regulatory approvals and consents
for acquisitions;
- the performance and demand for
the products and services we offer, including the level and timing
of withdrawals from our collective investment products;
- our ability to grow revenue,
attract and/or retain highly skilled people, control expenses and
attract the capital necessary to achieve our business goals and
comply with regulatory requirements;
- our ability to control operating
risks, information technology systems risks and outsourcing risks,
the possibility of errors in the quantitative models we use to
manage our business and the possibility that our controls will fail
or be circumvented;
- the potential for new products
and services to impose additional costs on us and expose us to
increased operational risk, and our ability to protect our
intellectual property rights;
- changes in government regulation
or new legislation, which may increase our costs, expose us to risk
related to compliance or impact our customers;
- 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 impact 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 2008 Annual Report on Form 10-K,
our Current Report on Form 8-K dated May 18, 2009, 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 press release speak only as of the
date hereof, 1 December 2009, and we do not undertake efforts to
revise those forward-looking statements to reflect events after
this date.
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