State Street to cease transition management offerings in London and Hong Kong

Reduced demand in EMEA has led to State Street closing its transition management operations in London and Hong Kong.
By Paul Walsh
State Street has confirmed it will close its transition management operations in London and Hong Kong due to diminishing demand for the services.

In a statement seen by Global Custodian, the US custodian bank confirmed that fading demand for transition management in the EMEA region along with moves to passive mandates, alternative assets and LDI mandates had led to the decision.

Insourcing transition management by large asset owners, which has reduced the margins in the transition management business, has also been cited as a contributory factor.

It is hoped that the move will help streamline infrastructure to create efficiencies and take advantage of centralising processing and trading.

State Street’s transition management teams in Boston, Sydney and Singapore will continue operations as normal.

“We remain committed to the transition management business. We are confident that we can continue to effectively serve our global clients with the management of complex investment implementations and asset allocation changes,” read the statement.

The closure follows news earlier this year that State Street agreed to pay more than $64 million to US authorities to resolve an investigation that the bank had deliberately overcharged six European clients for transition management services.

US officials charged two former State Street executives in their part in the scheme in 2016.

Investigators claimed the State Street scheme defrauded six clients through secret commissions on billions of dollars of trades between February 2010 and September 2011.