UPDATE
BUY-SIDE
State Street’s Charles River deal appears to have
struck a chord with asset managers
S
tate Street’s $2.6 billion deal
for front-office technology pro-
vider Charles River Development
appears to have sparked interest
within the asset management
community.
Despite questions being raised
about the valuation of Charles
River at the time the agreement
was announced, State Street’s goal
of improving its front-to-back
offering was raised in multiple
panel discussions at the InvestOps
conference in London.
Mike Tumilty, director of global
operations at Aberdeen Standard
Investments, suggested data man-
agement could be outsourced and
pointed towards State Street as a
potential solution given its scope of
services.
“If you look at that proposition:
custody, fund admin, middle-office,
they have a GX-type data solution
and they just added Charles River,”
said Tumilty. “When you add those
component parts together, I’m sure
there are other third-party service
providers who are looking at them
and saying, ‘How many parts of the
value chain could we poach here
from a single supplier?’
“From a strategic perspective,
it’s quite appealing from my point
of view, looking at the P&L of our
organisation to think about being
able to buy front-to-back, back-to-
front fully configured applications
with all of the data having been
cleansed, scrubbed, validated,
taking all my data feeds from the
Bloomberg, Thomson Reuters,
Fitch and S&Ps of this world.”
On the topic of one provider
offering a range of solutions, Jim
Kearney, global head of investment
operations, Vanguard, questioned
whether it was a concern for other
service providers and technology
vendors given State Street’s recent
move.
“I see some innovation from
custodians and what they are doing
with their data,” said Kearney.
“With State Street buying Charles
River Development, do you worry
about innovation coming from that
side of the market and that full
front-to-back [offering] being one
solution that fixes it all?” he asked
the panel.
In response, Broadridge’s, Mark
Weller, managing director of
EMEA asset management, said that
some people don’t want to be tied
up with an individual platform and
that a front-to-back solution isn’t
the only way to go.
“If you look at the custodians and
fund administrators, again, I think
they are the best example of a con-
vergence between ops and tech,”
said Weller. “Tech is replacing the
ops side of it. Clearly, Charles River
Development, Eze, these kind of
acquisitions are about getting the
full lifecycle.
“In some cases, there is a lot to
say for that, but in other cases
people don’t want to be tied to an
individual platform. Some of those
platforms are good at one asset
class but not good at another.
“It’s about providing a platform
for most of their requirements, but
giving them the access to plug and
play a bit. If one desk doesn’t like
that solution or it doesn’t fit their
asset class then they can switch it
out and use something else.”
Issue 57 // TheTradeNews.com // 11