State Street launches back-office services unit for real estate and infrastructure funds

Service will provide real-estate and infrastructure funds with back-office investment services.

By Joe Parsons

State Street has created a new real assets fund services unit which will provide back-office investment services to real estate and infrastructure funds.

The new unit will build on State Street’s existing real estate platform, which administers around $165 billion in real estate assets, as it looks to capture new investments from private equity managers.

“Global infrastructure investments are projected to amount to $70 trillion by 2030, making the sector the largest frontier opportunity for institutional investors and private fund managers for the next several decades,” said Scott Carpenter, global head of private equity and real assets fund services for State Street’s Alternative Investment Solutions (AIS) group.

State Street has hired Kyle Alexander, a former senior controller for infrastructure manager Global Infrastructure Partners, to lead product strategy and growth for the new business.

He will report to Barry Johnson, who has been named head of real assets fund services for North America, and Cesar Estrada, head of product management for private equity and real assets fund services for North America.

Real assets under administration totalled $725 billion at the end of 2017, and was one of the fastest growing assets for fund administrators according to research firm eVestment. It also predicted allocations by pension funds and other clients into real assets will amount to over $22 billion for 2018, more than private equity.

State Street is the number one administrator for real assets, according to a recent eVestment survey, followed by BNY Mellon and Citco Fund Services.

The survey also detailed how general partner (GP) and limited partner (LP) clients will increasingly look to administrators to handle their back-office needs, particularly for customised reporting services.

“We have seen a steady flow of side letter agreements… The most frequently addressed terms are notice periods, lock-up terms, key man clauses, transparency and reporting requirements,” said one large global administrator in the survey.

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