State Street Global Advisors

State Street Global Advisors
Subsidiary
Industry Financial services
Founded 1978
Founder Scott F.Powers, President & CEO
Headquarters Boston, Massachusetts, United States
Products Asset management, Mutual funds, Exchange-traded funds
AUM Increase$2.4 trillion
Number of employees
 2,500+
Parent State Street Corporation
Website www.ssga.com

State Street Global Advisors (SSgA) is the investment management division of State Street Corporation and the world’s third largest asset manager, with more than $2.4 trillion (USD)[1] in assets under management as of 30 June 2014.

The company services financial clients by creating and managing investment strategies for non-profit foundations, businesses, corporations, associations, governments, educational institutions, and religious organizations. In addition to institutional services, SSgA produces investment vehicles for the retail market in the United States, Europe, Asia, and Australia.

SSgA employs 2,400 people in 25 locations (11 of which handle assets) around the world.

History

The asset management division of State Street Bank was founded in 1978 in Boston, Massachusetts. Its first three products were a domestic index fund, an international index fund (based on the MSCI EAFE index), and a short-term investment fund. By 1989 the division had $53 billion (USD) in assets under management.

In 1990 State Street Global Advisors was formed as a separate entity from State Street Bank with the mission of expanding globally. SSgA opened its first global office in London. By 1994 SSgA had offices in Brussels, Hong Kong, Toronto, Paris, Sydney, Tokyo, Dubai, San Francisco, Montreal, and Atlanta. Between 1995 and 1999 five more offices opened in Munich, Zürich, Santiago, Singapore, and Chicago. From 2000 to 2007 SSgA set up operations in Milan, Bangalore and Melbourne.

SSgA invented the investment vehicle known as the exchange-traded fund (ETF) in 1993 with the introduction of the S&P 500 SPDR product (Ticker: NYSE Arca: SPY),[2] which is traded on the American Stock Exchange. SSgA is the number two ETF manager in the world second only to BlackRock.[3]

Assets under management climbed to $161 billion (USD) in 1994 and more than quadrupled to $667 billion by 1999.

Since 2000, SSgA has focused on increasing its client based outside of the United States and developing actively managed investment products. As of 2006, one-third of assets under management were from non-US investors.

In 2003, SSgA's Boston office moved to the newly completed State Street Financial Center building at One Lincoln Street.

SSgA launched the first foreign real estate ETF in 2006 (Ticker: NYSE Arca: RWX),[4] which provides investors in the US an easy way to access the international housing and commercial development markets.

In January 2011, SSgA completed its acquisition of Bank of Ireland Asset Management (BIAM). The acquisition was first announced in October 2010 for approximately €57 million. The acquisition enhances SSgA’s range of investment management solutions and expands State Street’s overall presence in Ireland where it has been serving institutional clients for 15 years.[5]

Products and services

SSgA creates customized investment strategies for institutions. SSgA manages the assets for clients by setting up commingled funds (otherwise known as common trust funds).

In addition to institutional products, SSgA has 46 ETF investment products in the US market, as of March 2007. The ETFs track international and domestic indices based on market capitalization, investment style, sector, industry, or commodity. ETF products are also available in other parts of the world such as Belgium, France, Hong Kong, and Singapore under the streetTracks brand.

SSgA has 26 Mutual Fund products divided by investment type: money markets, bonds, equities, and diversified funds of funds (also known as life style funds).

SSgA partners with seven companies in various markets to produce local investment strategies for clients. They are Advanced Investment Partners; Asian Direct Capital Management; GovernanceMetrics International (GMI); Innovest Strategic Value Advisors, Inc.; Rexiter Capital Management Limited; Shott Capital Management, LLC; SSARIS Advisors, LLC; The Tuckerman Group, LLC; and Wilton Asset Management, LLC.

Lawsuits

In October, 2007, several pension funds have sued State Street Corp. for the alleged mishandling of several bond funds managed by SSgA.[6]

In 2008, State Street Bank was sued by Trust Co. for Fixed Income Funds Investment.[7] The case was settled in 2010.

In April 2009, a class action was filed against State Street, alleging SSgA chose illiquid, leveraged, and risky securities in their short-term, liquid fund products.[8]

Notes

  1. ↑ http://www.ssga.com/about_ssga/about_ssga_hm.html
  2. ↑ Jen Ryan. "Spyders Widen Web". TheStreet.
  3. ↑ "ETF League Table As Of Jan. 21, 2014". IndexUniverse.
  4. ↑ John Spence. "New real-estate ETF is a globe-trotter". MarketWatch.
  5. ↑ "State Street Global Advisors Completes Acquisition of Bank of Ireland Asset Management". Business Wire. 10 January 2011.
  6. ↑ Appell, Douglas (October 15, 2007). "SSgA defends its 'low-risk' funds". pionline.com.
  7. ↑ "State Street Bank and Trust Co. Fixed Income Funds Investment ERISA Litigation".
  8. ↑ Williamson, Christine (April 8, 2009). "Class action sought in State Street suit". pionline.com.
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