MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Thursday, April 12, 2001 BGI Hands Off Admin Biz Barlays Global Investors is handing over its domestic asset administration business -- and its staff -- to Investors Bank & Trust (IBT), which is owned by Investors Financial Services. While the move follows an industry-wide trend to outsource backoffice operations, unusual in this deal is the complete transfer of the business, including its employees, equipment, and physical plant. The transfer is expected to be effective on May 1. "We're transferring the US asset administration business to IBT, which wanted to establish a West Coast presence," said BGI spokesperson Tom Taggart. "This transfer also involves 275 BGI employees who will become employees of IBT, still serving their biggest client, BGI." Taggart estimated that BGI currently has approximately 1,500 US employees, so the switch will affect approximately 18 percent of the domestic workforce. Taggart insisted that the transfer is unrelated to the bear market. "This move has absolutely no relationship to the market environment," said Taggart. "This is a strategic move the BGI has thought about for quite a long time." BGI will realize a known but undisclosed savings due to the switch. However, as an added benefit, BGI will not have to worry about converting its technology platforms to accommodate T+1 settlement. "The T+1 is actually a really big thing," explained Taggart. "That alone with a lot of other things that you have to do on a technology front, it's something that IBT is way ahead of the game on and certainly played into the decision to select them." The BGI employees will remain in Sacramento, while IBT's existing offices in Walnut Creek, California, and San Francisco will eventually be merged into the Sacramento office. The new division will report to Mike Rogers, executive vice president of operations. Why not hang onto the existing facilities, if IBT is looking towards West Coast expansion? "It made more sense to combine into one facility," explained Kevin J. Sheehan, chief executive officer and president of IBT. IBT, which has performed mutual fund administration since 1996 and ETF administration since last year, wins the rest of BGI's US asset administration business as well as a five-year exclusive contract. IBT is expected to net $50 million annually from BGI. Printed from: MFWire.com/story.asp?s=26506 Copyright 2001, InvestmentWires, Inc. All Rights Reserved |