State Street has agreed to acquire Charles River Systems (Charles River Development), an investment management software provider, for $2.6bn in an all-cash deal.
Charles River Systems, which is headquartered in Burlington, Massachusetts, mainly focuses on offering solutions that automate front and middle office investment management functions on a single platform across asset classes.
The company’s Charles River Investment Management Solution (Charles River IMS) is used by institutional, wealth, asset owner and alternative investment firms to manage their assets.
The main components of the Charles River IMS are portfolio decision support, order management, trading, compliance, IBOR, performance measurement/attribution, risk, collateral management, post-trade settlement data provisioning and data management.
State Street chairman and CEO Jay Hooley said that the acquisition marks a key milestone in the firm’s digital and technology transformation to offer differentiated solutions and data to clients. In addition to that, the transaction also allows State Street to address its $8bn revenue pool for front office services.
Hooley said: “Clients today want solutions that can add value and achieve efficiencies from portfolio modeling and construction all the way through to custody as they face increasing complexity and regulatory expectations, and the need to manage costs and achieve product or geographic expansion.”
According to State Street, the combination of Charles River Development’s front-office systems with its current front, middle and back office capabilities, will enable it to deliver a global front-to-back platform for both asset managers and asset owners.
The Boston-based financial services and bank holding company claimed that the front-to-back platform will be unique in the investment servicing sector.
Further, State Street said that the interoperable platform will allow investment workflows, offer advanced data aggregation, analytics and compliance tools, in addition to linking and exchanging data with other industry platforms and providers.
Charles River CEO Peter Lambertus said: “In today’s SaaS technology environment, Charles River’s hosted platform provides for up-to-date software, data provisioning, management, open integration and optimal operations which relieves clients of the cost and burden of on-premises operations.
“These SaaS capabilities will play a major role in the overall end-to-end offering.”
Based on receipt of regulatory approvals and meeting of customary closing conditions, the transaction is anticipated to be closed in the fourth quarter of 2018.