State Street is reportedly reviewing various strategic alternatives for its asset management arm, including a merger with UBS and Invesco.
The firm is now informally working with an adviser for exploring various options for State Street Global Advisors in order to achieve scale, reported Bloomberg citing people familiar with the issue.
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Neither of the firms involved confirmed the development.
The report also stressed that the firms have not yet arrived at a final decision and the possibility of a deal materialising is still uncertain.
State Street and UBS have already held talks regarding a merger of their asset management units, reported The Wall Street Journal.
The report said that the two sides were close to a deal regarding State Street Global Advisors, which manages over $3trn in assets.
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By GlobalDataEven though a deal did not take place, the two firms remained in touch, added the report.
After mulling several options, executives of State Street conceded that the unit needs to be bigger to become a more competitive player.
BlackRock’s iShares and Vanguard are among the key competitors of State Street Global Advisors.
Other consolidation plans
State Street’s move is in line with its peers, who are recently reviewing their asset management businesses.
These include French banking group Societe Generale, who has reportedly put its asset management unit Lyxor on the block, valuing the business at nearly $1bn.
Last month, a report revealed that Amundi and BNP Paribas are among the group of bidders planning to acquire Lyxor.
Similarly, Bank of Montreal (BMO) is also reportedly considering options for its $270bn asset management unit, including a partial sale.
Further, in October this year, a report said that US banking group Wells Fargo is looking to sell its asset management business.
The San Francisco-based lender is reportedly in discussions with asset management companies and private equity firms for a potential deal.
