SSgA will close down its stable value asset management business by the end of the year, confirmed spokeswoman Arlene Roberts.
In an e-mailed response to questions, Ms. Roberts said SSgA, following a thorough review, made “a strategic decision to exit this business through an orderly wind-down.”
As of March 31, SSgA had $8.4 billion of client money in the firm’s stable value strategy, down from $9.9 billion at the close of 2009, when the firm ranked 13th in terms of stable value assets under management in Pensions & Investments’ annual money manager survey for the latest calendar year.
SSgA’s decision reflected a broad range of uncertainties in the market now, including the persistent challenges stable value providers have faced recently in obtaining new wrap insurance capacity. Company executives concluded that money market funds would prove a more suitable cash option in SSgA’s defined contribution lineup, she said.
In pursuing an orderly wind-down of its business, SSgA is recommending clients “immunize their accounts immediately and convert to money market instruments in order to preserve current favorable market value,” or transfer their assets to another stable value manager.