State Street-ABP Joint Venture Buys Shott Capital Management

State Street Global Alliance LLC, a jointly owned subsidiary of State Street Global Advisors (SSgA) and the Dutch pension fund ABP, has acquired a majority stake in the assets of Shott Capital Management, LLC (SCM). SCM specialises in distribution management

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State Street Global Alliance LLC, a jointly-owned subsidiary of State Street Global Advisors (SSgA) and the Dutch pension fund ABP, has acquired a majority stake in the assets of Shott Capital Management, LLC (SCM). SCM specialises in distribution management and private equity partnership investing. The transaction is expected to close in the fourth quarter.

State Street Global Alliance aims to forge partnerships with specialist asset management firms around the world on behalf of SSgA and ABP. As a subsidiary of the Alliance, SCM will continue to specialise in the management of in-kind distributions from venture capital partnerships and private equity investment services. SCM is led by George Shott, founder and chairman, along with a staff of 23 investment management and support staff.

“As a market leader with an outstanding reputation in the marketplace, Shott Capital is an excellent addition to the State Street Global Alliance,” says Jay Cromarty, president of State Street Global Alliance, LLC. “George and his team bring tremendous experience and expertise to this specialized segment of asset management. We look forward to the collaboration with Shott Capital and to the opportunity to offer SCM’s value added services to existing and future SSgA clients.”

Shott Capital clients include public and private pension plans, foundations, endowments, and high net worth individuals, Shott Capital Management is also a discretionary manager of investments in venture and buyout partnerships. The company, which has offices in San Francisco and Boston, was founded in 1991. SCM will maintain its name and operate as a separately capitalized, independently managed Global Alliance company.

“We are pleased to join State Street Global Alliance,” says George Shott. “The alliance structure allows us to retain operational autonomy, thereby preserving our culture and entrepreneurial focus. It is extremely important for SCM to be able to align itself with an organization that has the global platform of State Street and ABP. State Street’s global presence helps strengthen our core competence in technology investing and enhances our ability to offer our distinctive services to a global clientele.”

The management team of Shott Capital will also include Alan Chai, managing director of distribution management; Stacey Brenner, managing director of marketing and client service; and Julie O’Donnell, managing director of private equity investment management.

State Street Global Alliance LLC, created with ABP in February 2001, currently has seven additional members around the world-Advanced Investment Partners, a U.S. equity quantitative fund manager based in Clearwater, Florida; Boston Capital Management, a holding company for Pallada Asset Management, a Moscow-based fund manager; Rexiter Capital Management, a London-based active fundamental emerging markets manager; SSARIS Advisors, LLC, a Stamford, CT based absolute return investment manager; The Tuckerman Group, a manager of direct and passive real estate investment portfolios based in Purchase, New York; BDC Asset Management, an alternative investment manager based in Boston, MA; and Innovest Strategic Value Advisors, an investment research and sub-advisory firm based in New York, NY.

ABP, the pension fund for public employees in the governmental and education sectors in the Netherlands, controls assets worth Euros 142 billion on behalf of 2.4 million participants and retirees. At the end of Q2 this year, its portfolio consisted of 51% fixed income, 32% equities, and 17% alternative investments. Its strategy is to educe fixed income in favor of equities and t increase private equity, hedge funds, commodities and other alternative investments, plus asset backed securities, corporate bonds and inflation linked bonds.

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