State Street integrates MSREI’s fund servicing operations
01 March 2013
By Asia Asset Management
State Street Corporation has successfully integrated Morgan Stanley Real Estate Investing’s fund servicing operations.
The integration, which began in February 2012, involved more than 150 Morgan Stanley Real Estate Investing (MSREI) accounting, operations and technical staff moving to State Street along with proprietary real estate servicing technology. The move builds on a 40-year relationship between the two firms and expands State Street's alternative and real estate fund servicing capabilities. State Street is providing comprehensive accounting and administrative services to MSREI on a global basis across MSREI’s full spectrum of investment vehicles with US$36 billion in assets under management.
"State Street’s integration of our real estate fund servicing operations has been seamless, and we have been very pleased with their capabilities, technologies and commitment to customer service," said Michael Levy, global chief financial officer and chief operating officer of MSREI. "State Street’s leadership in servicing alternative assets will ensure that Morgan Stanley Real Estate Investing can stay focused on delivering returns for investors."
George Sullivan, executive vice president and global head of State Street’s alternative investment solutions (AIS) group, said: "Rising operational and technology costs, complex fund structures, increased governance and transparency demands are just some of the factors driving the need for a strong administration partner in real estate fund management. Our integration of MSREI’s fund servicing operations further strengthens State Street's ability to service this growing asset class."
A recent survey of asset owners showed that more than 20% of respondents said they plan to increase their allocation to private real estate over the next year, with the figure rising to nearly one-third of respondents in the public defined benefit space. Mr. Sullivan added: “Investors are seeking new sources of value, and with this evolving trend towards private real estate investments, we anticipate growth in the outsourcing of real estate fund administration. Real estate investors can benefit from State Street’s expert team and systems that are specialised for real estate clients and which support investors’ long-term growth, cost management and efficiency of operating models.”
State Street's AIS group provides a comprehensive suite of middle office, fund administration, risk analytics and credit services to hedge funds, private equity funds, real estate funds and institutional investors. The AIS team has more than 3,000 employees in multiple offices around the world, and manages approximately $1.1 trillion in alternative assets (as of December 31, 2012).
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