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Behind State Street’s Investment Management Division

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Strong global equity markets

The Investment Management division of State Street Corporation (STT) witnessed a substantial increase in its total revenues in 1H17 compared to 1H16. In 1H16, the company’s Investment Management division reported total revenues of $589 million. 

In 1H17, this division garnered total revenues of $819 million, which reflects a substantial rise of 39%. This increase was primarily due to strong global equity markets in 1H17.

State Street’s Investment Management division witnessed a rise of 30% in its trading services revenues in 1H17 compared to 1H16. In 1H17, the division garnered $35 million of revenues from its trading services compared to $27 million in 1H16.

However, the company’s exchange-traded funds and the General Electric (or GE Asset Management) operations that the company has acquired also contributed to the rise in the Investment Management division’s total revenues.

State Street’s Investment Management division saw a substantial rise in its total expenses in 1H17 compared to 1H16. In 1H16, the Investment Management division reported total expenses of $500 million and in 1H17, the division incurred total expenses of $640 million, which reflects a 28% increase. 

This rise was mainly due to increases in its incentive compensation and expenses related to the acquisition of the GE Asset Management operations.

State Street’s Investment Management division witnessed a substantial increase in its management fee–related revenues in 1H17 compared to 1H16. In 1H17, the division garnered management fee–related revenues of $779 million compared to $563 million in 1H16, reflecting a 38% increase.

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Enterprise values

State Street Corporation (STT) has an enterprise value of $52.8 billion. Its peers (XLF) have the following enterprise values:

  • Northern Trust Corporation (NTRS): $126.9 billion
  • BlackRock (BLK): $69.3 billion
  • Bank of New York Mellon (BK): $19.8 billion
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