The acquisition last year (2010) of Mourant International Finance Administration, the alternative fund services arm of the Jersey-headquartered legal and financial services firm, is proving a highly successful move, according to State Street senior vice-president and head of private equity and real estate services Phil McGowan (pictured).
“We are expecting strong growth in Jersey and Guernsey, and we are thinking that private equity and real estate are extremely good places to be right now,” McGowan says. “That’s why we made the acquisition and are putting our resources into the Channel Islands.
“The people and skills that come with acquisitions are extremely important. It’s a very interesting time for the Channel Islands, and it’s good to see that we in general continue to evolve.”
The acquisition has made Boston-based State Street the world’s largest provider of administration services to private equity and real estate funds, and the second largest hedge fund administrator behind Citco Fund Services.
The acquisition of the Mourant business was important for gaining an international foothold in private equity and real estate, adds McGowan. “One of the drivers has been to grow outside the US,” he says.
“MIFA represented a significant private equity and real estate business in a region in which we didn’t previously have a large presence,” he says. “We’ve been extremely happy with the purchase; the business has show strong returns and integration has been faster than we anticipated.”
State Street is confident about growth in the alternative funds sector in the Channel Islands. “We started to see an increase in private equity activity towards the end of 2010 as investors’ liquidity improved, although fundraising remains challenging,” McGowan says.
“A lot of people are focusing on Asia and the emerging markets, raising money there and deploying capital through vehicles domiciled in the Channel Islands to these markets. This trend is likely to continue.”
State Street also believes the fund sector in general will continue to be characterised by increasing regulation and investor demand for transparency in 2011, and the firm is confident about the capability it can offer.
“Our model is well suited to help our clients continue to grow and drive their business onward in terms of location, technology and personnel,” McGowan says. “Regulation is something which, if introduced in the right way, benefits everybody. Those of us in the industry need to be able to think about how we will adapt for our clients. For me, it’s about keeping competitive.”
