State Street Corporation (NYSE:STT) announced today that it has entered into an agreement to acquire Mercatus, Inc., a premier front-and-middle-office solutions and data management provider for private market managers. The transaction is expected to be completed in September subject to customary closing conditions. Financial terms are not being disclosed.

In connection with the acquisition, the company will launch its State Street AlphaSM for Private Markets solution which will allow institutional investors to fully manage the entire lifecycle of their infrastructure, private equity, real estate, private debt and fund of funds investments through a fully integrated, digital front -to-back, single platform. This includes the ability to provide whole portfolio exposure to managers investing in both public and private markets.

“Investors in private markets have historically struggled with inefficient and manual processes because existing solutions are too fragmented and rigid to meet their changing investment requirements,” said Spiros Giannaros, president and chief executive officer of Charles River Development, a State Street Company. “Mercatus’s focus and solution for private markets augments Charles River’s market leading platform for public markets, enabling us to support clients across the full spectrum of their investment needs.” 

The solution will also reach across key areas such as cloud-based asset management, deal management, ESG, investor relations and portfolio monitoring allowing clients to make faster and more informed investment decisions as well as improve client service levels with better responsiveness and transparency. In addition, it will enable clients to have more granular visibility into asset and fund level data to help solve challenges caused by increased fund complexity, more sophisticated investors, the need for better transparency and regulatory obligations.

"Investors in both public and private markets are realizing the risk and inefficiencies created across their bespoke front, middle, and back office solutions," said Haresh Patel, chief executive officer of Mercatus. "We are excited to join forces with State Street and Charles River Development to achieve a new one office vision and deliver a fully integrated front to back; public to private; technology, data, and services offering all under one platform."

“Institutional investors are turning to the private markets as the hunt for alpha intensifies,” said Paul Fleming, executive vice president and global head of State Street's Alternatives Segment. “Expanding our alternative offerings will help us meet the multifaceted needs of these investors and provide our clients with even more solutions.”

Mercatus has operations in the US, UK, and India, and manages more than $1 trillion invested capital across its global private markets client base. Mercatus’s client base includes some of the most sophisticated managers in private equity, infrastructure, real estate and private debt.