State Street to buy Goldman Sachs Administration Services
State Street Corporation is to acquire Goldman Sachs Administration Services (GSAS), a leading hedge fund administrator, from The Goldman Sachs Group in a cash transaction with a total purchase price of $550m, subject to certain adjustments.
Pending regulatory approvals and other customary closing conditions, the transaction is expected to be finalized early in the fourth quarter of 2012.
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.
A global service provider to hedge funds, GSAS administers about $200bn in single manager hedge fund assets on behalf of about 150 investment manager clients around the world.
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 part of Goldman Sachs.
George Sullivan, executive vice president and 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.”
“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.”
Cory Thackeray, managing director and global head of GSAS, will continue to lead the teams servicing the GSAS clients post-close.
The acquisition will strengthen State Street’s global leadership in hedge fund administration. The firm claims it is the top servicer of alternative assets in the world with $877bn under administration at June 30, 2012.