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State Street, UBS Reportedly Mull Asset Management Tie-Up

Editorial Staff

16 December 2020

are discussing the possibility of merging their asset management arms, according to the Wall Street Journal, citing unnamed sources.

UBS declined to comment to this news service. State Street also declined to talk about the matter.

The organisations have held talks since early this year and by the summer they were near an agreement, the report’s sources said. 

State Street had hired Goldman Sachs to review the options for its investing business, called State Street Global Advisors.

Such a story comes at a time when asset management is increasingly a scale business, as seen by the rise of behemoths such as BlackRock and Vanguard. In October, for example, Morgan Stanley kept the M&A carousel spinning by agreeing to buy US-based Eaton Vance, a business with $500 billion of assets under management. 

The WSJ story said that State Street’s ambitions have piqued interest from UBS, reviving discussions the two banks held nearly a decade earlier. The banks weighed a similar tie-up in 2012, the report said.

In recent years, UBS has refocused its business strategy away from investment banking – although this remains an important business line – towards wealth management, because the latter is seen as less hungry for capital, and earnings tend to be steadier.