State Street has confirmed that it will acquire hedge fund administrator Goldman Sachs Administration Services (GSAS) from the Goldman Sachs group in a deal worth up to $550 million, making the firm the top hedge fund administrator in the world based on industry data.
State Street already provides a suite of middle office, fund administration, risk analytics and credit services to hedge funds, private equity funds, real estate funds and institutional investors. Its alternative investment solutions (AIS) team has more than 3,000 employees in multiple offices around the world.
In GSAS, State Street is purchasing a global service provider to hedge funds that administers approximately $200 billion in single manager hedge fund assets on behalf of approximately 150 investment manager clients from locations across the globe.
The $550 million deal, which is subject to regulatory approvals and other conditions, will go through in Q4 2012. The deal does not include Goldman Sachs’s prime brokerage business.
State Street expects the deal to “be accretive in the first full year of operation on a cash basis”, it said in a statement.
It added that GSAS employees, including client-facing staff and the management team, will join State Street once the deal is finalised.
George Sullivan, executive vice president and the global head of State Street’s AIS team, said: “GSAS is a premier provider of hedge fund administrative services and represents a strong franchise supported by longstanding relationships with highly regarded clients and an industry-leading service philosophy similar to our own. Servicing alternative assets remains a strategic focus for State Street.”
“We expect that GSAS clients will benefit from State Street’s robust and flexible global servicing platform that is scalable for funds of all types and sizes. Our continued investment in our global operating platform and technology solutions makes us well-positioned to meet clients’ increasing needs for regulatory compliance, reporting, transparency and risk management requirements.”
“We look forward to continuing to serve [hedge funds], including many GSAS clients, through prime brokerage and elsewhere across our businesses globally and will work closely with State Street and our GSAS clients to ensure a seamless transition,” added John Willian, the global head of global securities services at Goldman Sachs.
Cory Thackeray, the managing director and global head of GSAS, said: “We are pleased to join the State Street AIS team, a group that has the same high-touch approach to client service as GSAS. With this transaction, we will be well-positioned to offer our clients an enhanced product offering that covers the entire investment lifecycle and provides relevant regulatory compliance, risk and transparency solutions that our clients often request to help them navigate today’s complex environment.”
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