Magazine article American Banker

First Data Acquiring Control of 440 Financial: To Be Top Administrator of Bank-Managed Funds

Magazine article American Banker

First Data Acquiring Control of 440 Financial: To Be Top Administrator of Bank-Managed Funds

Article excerpt

To Be Top Administrator Of Bank-Managed Funds

First Data Corp. has signed a letter of intent to buy a majority stake in a leading servicer of bank-managed mutual funds, industry sources said.

The agreement, struck last week, calls for First Data's Shareholder Services Group subsidiary to assume.management control of 440 Financial Group, Worcester, Mass.

Spokesmen for the two firms confirmed that such a letter had been signed, but declined to elaborate. Terms of the deal, which is subject to a 60-day due-diligence review, could not be learned.

The deal by First Data, which is known primarily as a processor of credit card transactions, highlights the ongoing consolidation among firms that manage back-office chores for banks and mutual fund companies.

For example, Boston-based State Street Bank and Trust Co. plans to acquire Investors Fiduciary Trust Co., Kansas City, Mo., a top fund custodian. Last year, Bisys Inc., a bank-technology firm in Little Falls, N.J., bought Winsbury Co., a leading administrator of bank mutual funds.

The acquisition of 440 Financial, a unit of State Mutual Life Assurance Company of America, also of Worcester, would make First Data the top partner of banks that manage their own mutual funds.

First Data's bank-fund assets under administration would total $40 billion, topping the $29.3 billion administered by Concord Holding Corp., the current market leader. Their combined client list would include Fleet Financial Group, Bane One Corp. …

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