State Street says asset management unit is not for sale

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State Street says asset management unit is not for sale

State Street has no plans to relinquish its asset management arm, executives said, as the company revealed exchange traded funds had buoyed a 26 per cent jump in assets under management in the year to September 30.

The executives, speaking during the company s third-quarter earnings call, declined to comment on reports that the manager had been in dealmaking talks with rivals about its fund business. Instead, they underscored how important the unit was for the company.

It s a business that helps us strategically from a portfolio perspective and for many years now it has been a bit of a laboratory for us to test out different things that give us an insight into the rest of the marketplace, said Eric Aboaf, the company s chief financial officer. Our overriding goal would be to continue to participate in the business, assuming that we can continue to improve performance.

We like the business, and we particularly like our business, he added.

State Street s asset management unit, State Street Global Advisors, had $3.9 tn in assets under management as of September 30, unchanged from three months earlier but 26 per cent more than 12 months earlier, buoyed by a surge of inflows into both ETFs and cash, according to the company s earnings report.

SSGA s ETF franchise crossed $1 tn in assets at the end of the third quarter, the manager reported.

Most of that money — $988 bn — is in US ETFs, according to Morningstar Direct. Those funds collected $62 bn in net inflows during the year ended September 30 according to the Chicago-based researcher. SSGA's $28.6 bn US mutual fund line-up, meanwhile, added $240 m in net inflows over the same period.

Speculation that a deal was being explored involving Invesco's asset management arm centred on reports that State Street has been in merger talks with State Street. State Street options for its asset management unit have also included a combination with UBS, Bloomberg reported in December.

Brown Brothers Harriman announced last month that it would acquire State Street s custody and asset servicing business. The $3.5 bn deal will allow the company to supplant BNY Mellon as the world s largest custody bank with $5.4 tn in assets under custody.

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