State Street buys Goldman’s hedge fund unit
State Street now the world's largest hedge fund administrator with purchase of Goldman unit
State Street Corp. Ticker:(STT) has announced that it is acquiring the hedge fund administration unit of The Goldman Sachs Group Inc. Ticker:(GS), making State Street the world’s largest hedge fund administrator.
The cash deal, valued at $550 million, was rumored last week, but the companies announced official confirmation early Tuesday morning.
The deal does not include Goldman’s prime-brokerage business.
The Goldman Sachs Administrative Services unit that is being acquired is responsible for approximately $200 billion in single-manager hedge fund assets on behalf of approximately 150 investment manager clients globally.
The deal will push State Street’s hedge fund administration assets to $877 billion, the company announced.
According to a Bloomberg report last week, State Street added $170 billion of hedge fund and private-equity assets when it purchased Mourant International Finance Administration in December 2009.
The transaction is expected to be completed this year, and State Street confirmed that it expects the deal to be accretive on a cash basis in the first full year of operation.
In a statement, George Sullivan, executive vice president and global head of State Street’s Alternative Investment Solutions unit, described Goldman’s administrative-services unit as a “premier provider of hedge fund administration services and represents a strong franchise supported by long-standing relationships with highly regarded clients and an industry-leading service philosophy similar to our own.”
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