State Street Clears Hedge Fund 'Hurdle'

July 3, 2002 ( - State Street has finally found a way in to the hedge fund business, having reached an agreement to acquire International Fund Services, a New York and Dublin-based provider of alternative investment services.

IFS services over 100 large asset management firms and private equity fund managers, representing more than 350 funds globally, according to the firms. IFS is headquartered in New York City, with operations centers in New York City and Dublin, Ireland, with approximately 500 employees.

“This acquisition marks an important milestone in delivering on two of our key priorities — enriching our relationships with sophisticated global investors and extending our capabilities in alternative investments, including hedge funds,” David Spina, State Street’s chairman and chief executive, said in a statement.

IFS provides fund accounting and administration as well as trade support and middle office services for alternative investment portfolios.

Spina also noted that State Street will take ownership stakes in service providers specializing in alternative investments, “as they increasingly allocate a larger share of their funds under management to non-traditional investments,” according to the statement.

The transaction is expected to close in the third quarter and have a neutral effect on earnings this year, State Street said.