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. ...