GLOBAL - State Street Corporation saw total revenue rise 8% in the second quarter of 2006 to US$1.7bn, up from $1.5bn in the previous quarter.
Total assets under management were $1.5trn, up 12% compared to last year, and revenue in Q2 was up 21% on 2005.
Investment management fees, generated by State Street Global Advisors (SSgA), were $232m, up 34% from $173m a year ago.
In a statement, State Street said management fees reflected “continued new business, an increase in average month-end equity valuations, and increased performance fees”.
Commenting on the results, Ronald E. Logue (pictured), State Street's chairman and chief executive officer, said: “State Street Global Advisors continues to win new business in quantitative active strategies, launch new ETFs, increase its fee revenue, and make a larger contribution to our bottom line. We continue to manage expenses in light of a dynamic market environment.”
Looking forward, Logue concluded: “The potential effect of higher short term interest rates in the U.S. in the second half of the year poses a challenge for us. As in past years, we may experience seasonal weakness in certain market-driven revenues in the third quarter. However, excluding the second quarter tax charges, the strength in the first half of the year increases our confidence that we will achieve at the high end of the ranges we established for the full year.”
Meanwhile, SSgA announced today a major expansion of its alternative strategies capabilities. The initiative broadens the firm’s traditional long-short strategies to include a new line-up of absolute return strategies, a string of new hires and a joint venture with a quantitative investment management boutique.
The current staff is led by Chris Woods, and was recently expanded to include Jonathan Chanis, Henri Fouda, and Todor Georgiev formerly of Caxton Associates, Mellon Capital Management and KBC Alternative Asset Management, respectively.
Woods and his team report to Sean Flannery, CIO North America and to Jane Tisdale, senior managing director of absolute return strategies.
A license has been entered into for dynamic allocation software developed by AlphaSimplex Group, a Massachusetts-based quantitative investment management company.
By Kristen Paech
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