It has been a common practice over the past decade for hedge
fund administrators to grow by taking over competitors, but the
deal that sent Goldman Sachs Administration Services under the
umbrella of State Street Corp. in October was no ordinary
acquisition. For one thing, the world’s largest
investment bank sold its highly respected administration
business to a smaller bank that had cut back its own
administration division. But more important were
Goldman’s reasons for selling: The bank was
not prepared to build up the staff it would need to guide
clients through the new regulatory demands accompanying the
Dodd-Frank Wall Street Reform and Consumer Protection Act.
Goldman began talking to potential buyers in early 2012, and in
July, State Street announced it would take over the 19-year-old
administration business for $550 million. ...