EUROPE - Mourant acquired by State Street to create PE servicing giant

Kim
02 December 2009

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European fund administrator Mourant International Finance Administration has been acquired by financial services giant State Street Corporation for an undisclosed sum.

The deal comes as demand for fund administration is on the up: increasing regulatory pressure means prospective investors may find peace of mind if investing with an administered fund. For example, while not necessary, it may lend credibility if funds are accredited by SAS 70 in the US or AAF in Europe - accreditations which require a fund manager's time and money if done independently.

Additionally, recent scandals (think Madoff) can give fledgling funds a brand from which to market themselves.

Some administration service providers reported 18-20% compound growth of both revenues and profits in the years leading to the crunch. Last September, around 10% of GPs utilised the services of an outsourced fund administrator, and this figure has since more than doubled to a fifth across the world. In the UK, touted as the most administrator-savvy market, up to a quarter of GPs are believed to be outsourcing this function.

This phenomenal growth is down to two major reasons: new outfits springing up as the industry shake-out spawns spinouts, as well as incumbent fund managers reacting to market changes. The market estimates long-term growth should stabilise at around 5%.

The deal is the latest for State Street, which acquired International Fund Services in 2002 and Investors Financial Services Corp and Palmeri Fund Administrators in 2007. Today the enlarged State Street Alternative Investment Solutions (AIS) has $420bn in alternative assets under administration and 2,400 employees across offices in Boston, Ireland, Toronto, London, Tokyo, New York, New Jersey and Sydney.

AIS parent State Street Corporation has $17.9trn in assets under custody and administration as well as $1.7trn under management.

Mourant has offices in Jersey and the Channel Islands and $170bn in assets under administration. It employs 650 people.