State Street is to acquire Charles River Development in an all cash transaction valued at $2.6 billion.
Charles River, a provider of order management systems for the investment industry, reported total revenues of more than $300 million in 2017. The company serves more than 300 clients across institutional, wealth, asset owner and alternative market segments, including 49 of the top 100 asset managers.
State Street says it intends to integrate the Charles River suite with its own front, middle and back office capabilities to deliver a global front-to-back platform for asset managers and asset owners.
The resulting platform will be supported by "deep enterprise data management capabilities, will enable investment workflows, provide advanced data aggregation, analytics and compliance tools, and connect and exchange data with other industry platforms and providers".
Jay Hooley, chairman and CEO of State Street, describes the transaction as an important milestone in the company's digital transformation strategy, opening up a new market segment for the firm's data assets.
"This acquisition will also enable us to address a large adjacent $8 billion revenue pool for front office services,”he says. “Clients today want solutions that can add value and achieve efficiencies from portfolio modeling and construction all the way through to custody as they face increasing complexity and regulatory expectations, and the need to manage costs and achieve product or geographic expansion.”