Asset servicer State Street has signed up global fund manager Invesco for its front-to-back asset servicing platform Alpha.
Invesco, which has roughly $1.4 trillion (€1.17 trillion) in assets under management, will migrate its investment servicing operations to Alpha in order to simplify its operating infrastructure, reduce risk and improve scale and operational efficiency.
According to State Street Alpha head John Plansky, “delivering real-time data and intelligence to investment managers is more important than ever” and the deal with Invesco will enable the asset manager to “improve data integration among multiple systems and databases to more easily and efficiently gain actionable insights from front office to back”.
The integration will begin in the second quarter of 2021 with a phased roll-out that is expected to be completed by 2024.
The signing is a major win for State Street which has invested heavily in the Alpha platform. The US firm paid $2.6 billion to acquire front office software firm Charles River back in 2018.
In the same year, asset servicing provider SS&C acquired Eze Software, another front office software firm, for $1.45 billion.
Meanwhile, software firm SimCorp has developed a front to back platform while BlackRock has continued to sign up asset managers for its Aladdin platform, including a recent deal with M&G via a partnering agreement with State Street.
In addition, French asset manager Amundi announced the launch of a separate technology business in March, Amundi Technologies, to compete with Aladdin.
According to State Street’s first quarter results, which were reported last week, one third of assets installed by the end of March were attributed to Alpha and three new deals for the platform were signed in the first quarter.
The Invesco deal is also indicative of a growing trend among large asset managers to extend their outsourcing arrangements from purely back office functions to more middle and front office processes.
This is in part driven by asset managers’ wish to better manage their data by relying on fewer external service providers.
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