State Street has acquired Charles River, a global investment information provider which has a modest Australian presence. The deal is worth US$2.6 billion, State Street announced over the weekend.
Charles River (the actual Charles river, by the way, flows through the city of Boston, home of State Street) will enable State Street to expand its solutions range in the front-office area, the firm indicated in a statement.
“Clients today want solutions that can add value and achieve efficiencies from portfolio modelling and construction all the way through to custody as they face increasing complexity and regulatory expectations, and the need to manage costs and achieve product or geographic expansion,” the statement said
When integrated with State Street’s existing front, middle and back-office capabilities, Charles River’s front-office systems will enable State Street to deliver a global front-to-back platform for asset managers and asset owners that will be unique in the investment servicing industry.
Jay Hooley, State Street’s chairman and chief executive, said: “This inter-operable platform, supported by deep enterprise data management capabilities, will enable investment workflows, provide advanced data aggregation, analytics and compliance tools, and connect and exchange data with other industry platforms and providers. [The] announcement represents an important milestone in our digital and technology transformation aimed at providing clients with differentiated solutions and data. This acquisition will also enable us to address a large adjacent $US8 billion revenue pool for front office services.”
Charles River is a privately held company headquartered in Burlington, Massachusetts, with offices in North America, Europe and the Asia-Pacific region. It has struggled to gain much traction in Australia despite many years of trying. The statement said the company had revenue of more than $US300 million in 2017 and its primary focus was to provide “solutions that automate front and middle office investment management functions across asset classes on a single platform”.
Greg Bright is publisher of Investor Strategy News (Australia)