State Street has acquired Mourant International Finance Administration (MIFA), the $170 billion alternative fund administration business of the offshore law firm Mourant.

The cash transaction, the details of which were not disclosed, is expected to close in the first quarter of 2010.

Earlier this year a management buy-out of Mourant's administration business was mooted. However, that option was abandoned and a buyer was sought for the company as Mourant wanted to divest itself of the administration side of the group.

Headquartered in Jersey in the Channel Islands, MIFA has around 650 employees in locations around the world, including in Dublin, Singapore and New York.

The company is known for administering private equity funds, which account for over $100 billion of its total assets under administration (AUA). It also provides administration services to real estate and hedge funds.

The deal strengthens State Street's already sizable alternative fund administration franchise. The bank had around $420 billion in alternative AUA at the end of September, making it the second largest provider of such services to the funds industry.

State Street's fund administration business has been built on acquisitions. The bank purchased International Fund Services (IFS) in 2002 and later acquired Investors Financial Services Corp and Palmeri Fund Administrators, both in 2007.

The combined State Street and MIFA business will rank as the world's largest alternative fund administrator in terms of AUA. It will be the largest provider of administration services to private equity and real estate funds and the second largest hedge fund administrator, behind Citco Fund Services.

"This acquisition will bring a wider and more comprehensive product offering to our existing and new customers and further develop our servicing footprint in Europe and Asia where expanded capabilities," said Jay Hooley, president and COO of State Street.

"MIFA's team of professionals will augment our existing alternative and private equity operations," added Jack Klinck, executive vice president and global head of State Street's Alternative Investment Solutions team.