GLOBAL – State Street Global Advisors says it is boosting its offering in the absolute return area with a new limited purpose trust company, various hires and a new licensing agreement.
State Street Global Advisors Capital Management Trust Co. is a New Hampshire-chartered, limited-purpose, non-depository trust company. It will help to provide clients with the “operational flexibility to access multiple strategies in the pursuit of alpha”.
It’ll provide a “medium for offering absolute return strategies to our institutional client base,” said senior managing director Jane Tisdale. It would be “seamless” for clients.
The move comes “at a time of rising institutional demand” for absolute returns. SSGA has around $4bn in such strategies and is rapidly “building out” its product set into more ‘esoteric’ areas, Tisdale added in an interview.
“We intend to provide institutions with access to alpha market_outperformance through investment with a firm that has a long fiduciary heritage,” the Boston-based firm said in a release.
And it has hired Jonathan Chanis, Henri Fouda and Todor Georgiev formerly of Caxton Associates, Mellon Capital Management and KBC Alternative Asset Management respectively. They join a team headed by senior managing director Chris Woods.
It has also licensed “dynamic allocation software” from AlphaSimplex, a firm headed by Massachusetts Institute of Technology professor Andrew Lo.
This would provide SSGA with a risk model for all the underlying sources of alpha, said absolute returns head Jane Tisdale.
Meanwhile, SSGA’s overall assets under management have risen to 12% to $1.5trn, according to State Street’s second-quarter earnings report. SSGA’s investment management fees were up 34% at $232m.
And the bank’s total assets under custody rose 13% to $10.9trn.
Overall revenues rose 21% o $1.7bn.
“Our strong results across all business units and geographies demonstrate the successful execution of our global strategy,” said chairman and chief executive Ronald Logue.