Edinburgh wins race to be State Street's European hub

STATE Street, the US asset servicing firm, is developing a European "centre of excellence" at its Edinburgh base in a move that will add another 90 jobs to its 750-strong Scottish workforce.

• John Swinney chats with State Street staff yesterday at the Ferry Road office chosen to be a cash servicing hub for Europe. Picture: Jane Barlow

The firm, which provides support functions such as accounting and administration for pension funds and other institutional investors, will manage all of its cash activities in the European market from the capital.

Barry Muir, chief operating officer for State Street, said Edinburgh was chosen over a number of other European locations to become a cash servicing hub due to the highly-skilled workforce and its proximity to major asset management firms.

"As an organisation, we evaluated where the best place for this function would be and we have high-quality organisations across Europe, so it was a very difficult decision for us," Muir told The Scotsman.

"Ultimately, we made a decision based on the size and scale of the operation we have here in Edinburgh, the talent pool we have here already and the talent pool available to us in the Scottish financial services market."

The Boston-headquartered firm, which is listed on the New York Stock Exchange, set up in Edinburgh in 1998 with just 40 staff. Yesterday's announcement, made at the company's offices on Ferry Road, will bring its workforce in Scotland to 840. Globally, it operates in 26 countries and 100 markets.

The move by State Street is a major boost for the Scottish financial services sector, which, despite the problems of Royal Bank of Scotland and HBOS, has continued to grow since the recession.

Owen Kelly, chief executive of Scottish Financial Enterprise, said the asset servicing industry is a "hidden success" for Scotland. Although few people understand what it involves, firms operating in this area are now major employers.

"The job market in the asset servicing space in very lively. There is now a clear career path in this area in Scotland."

Alan Thornburrow, chief executive of Scottish Investment Operations, the trade body for Scotland's fund management industry, agreed: "All of the major players in that business are in Scotland now - firms like Citi, JP Morgan, BNY Mellon, State Street. It employs a lot of people - thousands."

Scottish finance secretary John Swinney visited State Street's offices yesterday morning ahead of the jobs announcement. He said Scottish Enterprise and Scottish Development International worked with State Street to support its growth in Edinburgh but did not, on this occasion, offer grant funding. He argued that the deal was a real vote of confidence in Scotland's financial services sector, which some feared would go into decline following the crises at RBS and HBOS.

"A couple of our banking institutions had very real difficulties from 2008 onwards, but throughout all of that time the financial services sector continued to grow in Scotland," Swinney said.

"At a time when we have had a contraction of employment within particular areas of financial services, we've also had either new entrants coming in, such as Tesco Bank or Virgin Money, or you have had companies like State Street who have expanded their operations."