State Street Boston Corp. would quickly achieve its goal of becoming an internationally recognized money manager by purchasing Wells Fargo Nikko Investment Advisors, industry experts say.
The addition of Wells Fargo Nikko, a San Francisco-based money management firm that was recently put up for sale, would provide global name recognition and increase State Street's institutional money management operations to $350 billion in assets, almost double its current business.
"It would be a good move" on State Street's part, said Daniel Darst, executive vice president at Optima Group, Fairfield, Conn.
State Street emerged as a bidder for Wells Fargo Nikko in a Wednesday report by The Wall Street Journal. The paper said the Boston banking company was preparing to offer between $400 million and $500 million for Wells Fargo Nikko, which is jointly owned by Wells Fargo & Co. and Nikko Securities.
The amount was on the high end of what analysts projected Wells Fargo Nikko to fetch.
A spokesman for State Street declined to comment on the report. But he did not rule out an overture.
Wells Fargo Nikko specializes in managing index funds, which are baskets of securities that reflect the performance of a broad market index, like the Standard & Poor's 500. The company, which has operated as a partnership since 1990, has built a reputation with investors overseas, as well as customers in the United States.
Right now, less than one-fifth of State Street's earnings come from money management, while the rest is obtained by acting as custodian for securities that are bought for investment portfolios. But State Street has made in known that it wants to become more of a money manager.
State Street would not be alone in bidding for Wells Fargo Nikko. Observers said other large banks and insurance companies have expressed interest.