The managed account solutions business of JPMorgan Chase & Co.‘s (JPM) worldwide securities services arm is being acquired by UMB Fund Services Inc. (UMBFS), a subsidiary of Kansas City, Missouri-based UMB Financial Corp. (UMBF). The definitive acquisition agreement was announced by Milwaukee-based UMB Fund Services earlier this week.
The new business, which will be known as Managed Account Solutions, will provide service to the existing JPMorgan Worldwide Securities Services (WSS) managed account solutions clients and will also be promoted across the US. Financial terms of the deal were not disclosed.
As per the deal, UMBFS will open offices in Boston and in Jersey City to accommodate employees, who will be joining UMB Fund Services from J.P. Morgan Worldwide Securities Services. The deal is expected to close on June 30, 2010.
UMB Fund Services offers products and services to the fund industry and has more than 165 clients with combined assets of more than $167 billion.
The acquisition will facilitate UMBFS to provide services to the rapidly growing managed accounts segment and to serve both existing and future clients with the finest talent in the business. It will further help enhance branding and sales, and would help in growing relationships with clients and developing future prospects of the business.
WSS, part of JPMorgan’s Treasury & Securities Services segment holds, values, clears and services securities, cash and alternative investments for investors and broker-dealers, and manages depositary receipt programs globally.
During the first quarter of 2010, WSS recorded lower net revenue due to lower spreads in securities lending, lower liability balances and the impact of lower volatility on foreign exchange. Overall, the segment was affected by market levels, volumes and volatility, which influenced client flows and assets under management, supervision and custody.
On the whole, it is anticipated that after selling off its WSS division, JPMorgan’s Treasury & Securities Services segment’s revenue could be improved depending on the economic environment and other factors.
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