State Street Corp. will acquire Brown Brothers Harriman & Co.’s investor services business, which includes its custody, accounting, fund administration, global markets, and technology services, the firms announced Tuesday. Both companies aim to complete the acquisition by the end of the 2021 fiscal year.
BBH is a private global financial services firm composed of three segments: investment banking, private banking, and investor services. While BBH’s other businesses (investment and private banking) will continue to operate independently, the company’s investor services portion will be absorbed by State Street, meaning BBH employees will move to State Street and senior management will be integrated into executive roles at State Street.
“One of the most attractive elements for us is BBH Investor Services’ first-rate talent and team of professionals with [a history of] client-service excellence,” Ron O’Hanley, chairman and chief executive officer of State Street Corp., said in a statement. “This strengthens our value proposition and is completely aligned with our focus and vision of being our clients’ enterprise outsourcer and essential partner.”
The deal means that State Street will become the world’s largest asset services provider in terms of assets under custody. According to a statement from the firm, BBH Investor Services had $5.4 trillion in AUC at the end of June 2021, which will serve as an addition to State Street’s $31.9 trillion in AUC. State Street said the deal will also advance its goal of strengthening its relationship management, client service, operations, and technology.
“The investment servicing industry enjoys strong fundamentals as worldwide growth in financial assets drives industry revenues. This combination with BBH Investor Services helps us consolidate our position as the industry innovator and leader,” O’Hanley said.