Forbes – In a move that is likely motivated by the increased pressure on banks to limit their exposure to hedge funds, State Street has reached an agreement to sell its hedge fund unit SSARIS Advisors to the unit’s senior management. SSARIS specializes in hedge funds as well as hedge fund of funds, and provides hedge fund advisory services to clients. The unit managed around $1.4 billion in client assets through six funds at the end of 2013. The deal, financial terms of which were not disclosed, is expected to close in less than three months.
SSARIS represents a very small part of the $2.4 trillion in assets managed by State Street at the end of Q3 2014. But the proposed management buyout is significant as it marks an important step by the global custodian to fall in line with the Dodd-Frank Act that limits a financial institution’s total exposure to a hedge fund at 3% of its total tier 1 capital.
