State Street buys Shott Capital stake

State Street Global Alliance has acquired a majority interest in the assets of Shott Capital Management in a move to expand its private equity services business.

State Street Global Alliance, a jointly-owned subsidiary of State Street Global Advisors (SSgA) and the Dutch pension fund ABP, has taken a majority stake in US-based Shott Capital Management (SCM) for an undisclosed sum.


SCM is an investment advisor specialising in distribution management and private equity partnership investing. Following the takeover, SCM will continue to work on the management of in-kind distributions (distributions of stock from newly-listed companies) from venture capital partnerships and private equity investment services.


Shott Capital Management, which has offices in San Francisco and Boston, manages investments in venture and buyout partnerships. According to The Deal, Shott manages assets of more than 150 private equity partnerships representing commitments in excess of $2.2bn. The firm also manages investee company shares for limited partners in venture funds after start-ups have completed stock market listings. A spokesperson for State Street said that Shott manages approximately $8.8bn in post-venture-capital share distributions.


The business is led by George Shott, founder and chairman, with a staff of 23 investment management and support professionals, including Alan Chai, managing director of distribution management; Stacey Brenner, managing director of marketing and client service; and Julie O’Donnell, managing director of private equity investment management. SCM, which was founded in 1991, will maintain its name and operate as a separately capitalised, independently managed Global Alliance company.


“We look forward to the collaboration with Shott Capital and to the opportunity to offer SCM’s value added services to existing and future SSgA clients,” said Jay Cromarty, president of State Street Global Alliance, in a statement.


State Street Global Alliance, jointly owned by State Street and ABP, the world’s third largest pension fund which serves public employees in the governmental and education sectors in the Netherlands, was set up in February 2001. The business originated as State Street Global Advisors in 1997, which invested in small, innovative asset managers to add to existing competencies at SSgA. The Alliance currently has seven additional members around the world.