Bloomberg News – By Christine Harper and Ambereen Choudhury – June 11, 2012
Goldman Sachs Group Inc. (GS), the fifth- biggest U.S. bank by assets, is in talks to sell its hedge-fund administration unit to State Street Corp. (STT), according to a person with knowledge of the matter.
A final agreement is yet to be reached, said the person, who declined to be identified because the negotiations are private. The unit provides fund accounting, valuation and risk- management for hedge funds.
Regulators including the U.S. Securities and Exchange Commission have increased oversight of companies that do business with hedge funds in response to convicted fraudster Bernard Madoff’s Ponzi scheme and industry losses in 2008. State Street, the third-biggest custody bank, added $170 billion of hedge-fund and private-equity assets when it bought Mourant International Finance Administration, based in Jersey in the Channel Islands, in December 2009.
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