Custodial bank and asset manager State Street Corp. (STT) said Tuesday that it has agreed to acquire investment servicing firm Mourant International Finance Administration in a cash transaction, as part of the company's efforts to strengthen its global alternative asset servicing business.
The terms of the transaction were not disclosed. The company noted that the acquisition will enable it to expand into Europe and Asia and broaden its capabilities for servicing investors' growing real estate administration requirements.
Mourant International Finance Administration, or MIFA, is a provider of fund administration services, particularly for alternative investments, such as private equity, real estate and hedge funds. The company is based in Jersey in the Channel Islands and has approximately $170 billion in assets under administration. The firm has about 650 employees, with locations in the Channel Islands, London, Dublin, Luxembourg, Singapore, Hong Kong and New York.
Mourant originates from the offshore law firm, Mourant du Feu & Jeune, which was founded in Jersey in 1947. In late November, Mourant said it advised British insurer Beazley Group plc (BEZ.L) on relocation to Ireland. The firm had also advised U.S. investment bank JPMorgan Chase & Co. (JPM) in its GBP 1 billion takeover of UK stockbroker Cazenove, which is well-known for being the Queen's broker. State Street said it expects the transaction to close in the first quarter of 2010 and be slightly accretive to its fiscal year 2010 earnings, excluding one-time costs.
Commenting on the deal, Jay Hooley, president and chief operating officer of State Street said, "As alternative asset classes have become more mainstream, our institutional customers plan to continue to expand their use of this asset class. 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."
As of September 30, 2009, State Street's Alternative Investment Solutions, or AIS segment had more than $420 billion in alternative assets under administration. The segment has more than 2,400 employees, with locations in Boston, Ireland, Toronto, London, Tokyo, Sydney, New York and New Jersey.
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, or IFS, a provider of hedge fund administration services. State Street further strengthened its position in the segment with its acquisitions of both Investors Financial Services Corp. and Palmeri Fund Administrators in 2007.
On Monday, State Street said it has been retained by Morgan Stanley Investment Management, or MSIM to provide investment manager operations outsourcing services for approximately $300 billion in assets. The company will provide MSIM with global outsourcing services including trade settlement, portfolio administration and reporting and reconciliation services for a majority of MSIM's assets under management.
STT closed Monday's regular trading session at $41.30, up $1.10 on a volume of 6.63 million shares.In Tuesday's pre-market trading, the stock is trading at $41.65, up $0.35 or 0.85%. In the past 52 weeks, the stock has been trading in a range of $14.43-$55.87.
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