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State Street launches private markets service after Mercatus acquisition

Outsourcing2State Street is set to use its latest acquisition to target fund managers in the private markets.

The global custodian has entered an agreement to purchase Mercatus which provides front and middle office outsourcing for private market managers.

At the same time State Street has launched its AlphaSM for Private Markets service, a version of its front to back office asset servicing platform Alpha.

Alpha was launched earlier this year following the 2018 acquisition of front office software firm Charles River. The strategy was in response to the demand among asset managers to consolidate their IT infrastructure. Since then most major securities services providers have unveiled front to back office offerings of their own.  

State Street’s latest move is designed to appeal to firms managing infrastructure funds, private equity, real estate, private debt and fund of funds, asset classes where the use of digital and automated technology is generally less advanced than in mainstream markets.

“Investors in private markets have historically struggled with inefficient and manual processes because existing solutions are too fragmented and rigid to meet their changing investment requirements,” said Spiros Giannaros, president and chief executive officer of Charles River Development, a State Street company

Financial terms of the Mercatus acquisition were not disclosed and the transaction is expected to close in September.

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