State Street aims to grow model portfolio business fivefold

The asset manager is targeting 'north of $25 billion' of assets in its model portfolios over the next five to six years, up from roughly $5 billion currently.

State Street Global Advisors is aiming to grow its model portfolio business fivefold in as many years as off-the-shelf investment strategies boom across Wall Street.

The asset manager is targeting “north of $25 billion” of assets in its model portfolios over the next five to six years, from roughly $5 billion currently, according to Peter Hill, the firm’s head of model portfolio solutions.

The renewed push comes as model portfolios — which bundle together exchange-traded funds and mutual funds into ready-made strategies — grow ever more popular among the financial advisor community. BlackRock Inc., one of the largest providers, with $100 billion in assets, expects model portfolios to command $10 trillion in industry assets over the next five years, from about $4 trillion as of July.

State Street is attempting to carve out a larger slice of the growing pie.

“We are fully committed to investing in our model portfolio business to meet the needs of our advisors and our platforms as their adoption rate of models continues to grow,” Hill said in an interview on the sidelines of the Exchange ETF conference in Miami, Florida.

The asset manager has “refocused” on the operation over the last two years, said Hill, who’s been in his current role for roughly 18 months. The firm plans to hire between seven to 10 employees in marketing and sales to support the effort.

“There’s a lot that goes into the model portfolio business from an infrastructure perspective,” he said.