State Street announced an agreement to buy Charles RiverDevelopment in an all cash transaction for $2.6 billion, expected to close in Q4 2018. The acquisition will make available a “large adjacent $8 billion revenue pool for front office services,” said Jay Hooley, chairman and CEO of State Street. In an investor presentation, State Street noted that the front-middle-back office revenue pool is between $40 and $50 billion inclusive, and called the combination the “industry’s first-ever global front-middle-back office solution” from a single provider.
Ron O’Hanley, president and COO of State Street, said that it’s also a data play: “This acquisition represents not only a significant investment in our future but also the recognition that the ability to assist clients in managing their data needs and extract insights from their data is increasingly the most important differentiator for our industry.” The combination of State Street and CRD creates an open architecture data-enabled platform, which is interoperable with other front office systems and has advanced data aggregation, analytics and compliance tools.
Charles River Development is a private US-headquartered company with offices in North America, Europe and the Asia-Pacific region. With total revenues of more than $300 million in 2017, its primary focus is automating front and middle office investment management functions across asset classes on a single platform. The firm serves more than 300 clients across institutional, wealth, asset owner and alternative market segments, including 49 of the top 100 asset managers that in aggregate have more than $25 trillion in AuM.