State Street Corporation has agreed to acquire hedge fund administrator Goldman Sachs Administration Services (GSAS) from The Goldman Sachs Group, in a cash transaction with a total purchase price of USD550 million.
The deal, which pending regulatory approvals and other customary closing conditions is expected to be finalised early in the fourth quarter of 2012, will see State Street overtake Citco as the world’s biggest hedge fund administrator.
State Street expects the transaction to be accretive in the first full year of operation on a cash basis. Through dedicated teams globally, State Street provides a comprehensive suite of middle office, fund administration, risk analytics and credit services to hedge funds, private equity funds, real estate funds and institutional investors. State Street’s Alternative Investment Solutions (AIS) team has more than 3,000 employees in multiple offices around the world.
GSAS administers approximately USD200 billion in single manager hedge fund assets on behalf of approximately 150 investment manager clients from locations across the globe. GSAS employees, including client-facing staff and the management team, are expected to join State Street following the close of the transaction. The transaction does not include Goldman Sachs’ Prime Brokerage business, which remains an important offering of Goldman Sachs.
George Sullivan (pictured), executive vice president and global head of State Street’s AIS team, says: “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 extending these comprehensive solutions to GSAS’ clients.”
John Willian, global head of Global Securities Services at Goldman Sachs says: “We look forward to continuing to serve the hedge fund community, 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.”
Cory Thackeray, managing director and global head of GSAS, who will continue to lead the teams servicing the GSAS clients post-close, 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.”