State Street Corporation and InfraHedge, a UK-based company providing an independent governance and risk management infrastructure for institutional investors to invest in hedge funds through managed accounts, have formed a new strategic alliance marked by State Street’s majority equity investment in InfraHedge.
As the growth of institutional investment in hedge funds continues, managed accounts are increasing in popularity as a mechanism for institutional investors to obtain more transparency and insight into risk exposure. State Street will add InfraHedge’s managed account platform, which is aimed at global institutional investors, including pension funds, endowments, funds of hedge funds, wealth managers and sovereigns, as an offering within its alternative investment solutions suite of products.
“The alliance with InfraHedge enables State Street to further enhance the services we bring to our institutional and hedge fund clients and highlights our commitment to alternatives,” says George Sullivan (pictured), executive vice president and head of State Street’s alternative investment solutions group. “Institutional investors are increasingly looking to managed accounts as one way to access the hedge fund market while retaining a level of transparency, reporting and risk management they are accustomed to with other asset classes. We are confident that our clients will benefit from this unique offering, which we believe provides a competitive advantage to both State Street and InfraHedge.”
InfraHedge is a cost effective solution that allows institutional investors to utilise a managed accounts platform on a standalone basis, providing investors with significant flexibility alongside an independent governance and risk management infrastructure. The InfraHedge platform is differentiated from other platforms because of its integrated package of the various services required to operate a managed account structure while remaining independent of manager selection, and portfolio construction.
“I believe InfraHedge is the first managed account platform of its kind in the industry, and we are very excited to be working with a world class institution such as State Street,” says Akshaya Bhargava, founder and chief executive officer of InfraHedge. “State Street shares our vision of making hedge fund investing more controlled, transparent and cost effective for institutional investors.”
With over USD789 billion in alternative assets under administration as of June 30, 2011, State Street provides a complete suite of fund accounting, fund administration, corporate administration, and risk, analytics and credit services to institutional investors, hedge fund managers, private equity fund managers and real estate fund managers. Its dedicated alternative investment solutions group comprises more than 3,000 employees worldwide. In April 2010, State Street acquired fund administrator Mourant International Fund Administration (MIFA), further expanding its alternative investment servicing footprint in Europe.