State Street Corporation is to acquire BBH’s Investor Services business, including its custody, accounting, fund administration, global markets and technology services, for $3.5 bn in cash.
Following the transaction, BBH will continue to independently own and operate its separate private banking and investment management businesses.
The acquisition should be completed by year-end 2021, subject to regulatory approvals and customary closing conditions.
As of June 30, 2021, BBH Investor Services, a global asset servicer, had $5.4 trn assets under custody (AUC), which will be added to State Street’s $31.9 trn,
The group covers cross-border, alternatives, ETFs, and other high-growth asset classes.
The acquisition is expected to advance State Street’s strategy as an enterprise outsource solutions provider by creating the number one asset servicer globally, strengthening competitive positioning, expanding geographic coverage and enhancing client experience.
“The investment servicing industry enjoys strong fundamentals as worldwide growth in financial assets drives industry revenues. This combination with BBH Investor Services helps us consolidate our position as the industry innovator and leader,” said Ron O’Hanley, Chairman and Chief Executive Officer of State Street Corp.
He added, “We are enhancing our leadership position across a range of services, augmenting our position in a number of key markets, growing relationships with many of the leading global asset managers and owners, and increasing our capabilities and scale. Additionally, BBH Investor Services brings us strong talent, including industry leading service excellence and quality execution.”
Bill Tyree, managing partner of BBH, said, “We made this decision after careful consideration of the current and future landscape of the global securities servicing industry, including how best to support and innovate for the growing breadth and complexity of our clients’ servicing requirements,” said Bill, “State Street is the ideal partner – a firm that shares our core values of unmatched client service, integrity, trust, and a long-term commitment to sustainability.”
Upon closing of the transaction, BBH Investor Services employees will move to State Street. The senior management team will transition to State Street in executive leadership roles, and Seán Páircéir, currently partner and Global Head of Investor Services at BBH, will join State Street’s Management Committee.
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