BOSTON - Building on its industry-leading business in fund accounting and administration services, State Street Corp. will assume all fund accounting and daily pricing services for Merrill Lynch & Co.'s U.S. retail mutual funds.
Merrill's funds are made up of 227 portfolios with a total asset value of approximately $200 billion. State Street will be responsible for calculating 620 net asset values for these funds on a daily basis.
State Street is the largest full-service provider to 40 Act Mutual Funds in the United States, with more than $1.4 trillion of assets serviced, nearly four times larger than any other provider, according to Securities Data Publishing's annual Fund Accounting Service Guide.
"The surge in trade volumes and cross-border investments, along with the industry's decimalization and T+1 initiatives" to reduce the time between trade and settlement to one day from three, "are creating unprecedented demand for a total investment fund servicing solution," said Ronald E. Logue, vice chairman and chief operating officer of State Street.
The banking company has provided global custodial services to Merrill Lynch since 1974, he said.
Upon signing of the final agreement, State Street said it would assume Merrill Lynch Investment Managers' fund accounting center in Princeton, N.J., and retain the approximately 300 employees who work there. The transition is expected to be completed by yearend.