State Street Corporation has announced that it has entered into an agreement to acquire Mercatus, Inc., a front-and-middle-office solutions and data management provider for private market managers. The process is expected to be completed in September.
In connection with the acquisition, the company will launch its State Street AlphaSM for Private Markets solution which is designed to allow institutional investors to completely manage the entire lifecycle of their infrastructure, private equity, real estate, private debt and fund of funds investments through a fully integrated, digital front-to-back, single platform.
The addition of private markets to the wider Alpha platform allows the offering to compete with other solutions servicing institutional investors across public and private asset classes including Blackrock Aladdin, which acquired alternatives eFront in 2019, Northern Trust, SimCorp, Solovis and others.
“Investors in private markets have historically struggled with inefficient and manual processes because existing solutions are too fragmented and rigid to meet their changing investment requirements,” remarked Spiros Giannaros, president and chief executive officer of Charles River Development, a State Street Company. “Mercatus’s focus and solution for private markets augments Charles River’s market leading platform for public markets, enabling us to support clients across the full spectrum of their investment needs.”
“Investors in both public and private markets are realizing the risk and inefficiencies created across their bespoke front, middle, and back office solutions,” stated Haresh Patel, chief executive officer of Mercatus. “We are excited to join forces with State Street and Charles River Development to achieve a new one office vision and deliver a fully integrated front to back; public to private; technology, data, and services offering all under one platform.”
“Institutional investors are turning to the private markets as the hunt for alpha intensifies,” explained Paul Fleming, executive vice president and global head of State Street’s Alternatives Segment. “Expanding our alternative offerings will help us meet the multifaceted needs of these investors and provide our clients with even more solutions.”
We reached out to Mercatus VP Ali Mamujee to ask if the announcement would impact the firm’s focus on fund managers, an area where they serve a number of notable clients overseeing over $1tn in invested capital across the private asset classes. Mamujee confirmed that “for this initial phase we are going to keep our focus on fund managers and asset owners who have a strong direct focus”, while emphasizing the potential existing across the newly combined user-base to provide significant additional value and services.
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