Financial giant hungers to grow

W hen Ron Logue took over State Street Corp. in 2004, he adopted a simple strategy: Grow fastest where there's growth to be had.

So far, it's working out. State Street shares rose 18 percent in 2006 and positioned the Boston company this year to spend $4.5 billion in stock to buy crosstown rival Investors Financial Services Corp.

The deal in February was the latest in Logue's strategy of acquiring other businesses in the company's obscure but important financial services niche -- managing funds and handling transactions for institutional investors.

He also has pressed for higher returns from another segment, State Street Global Advisors, which invests money for institutional customers. It contributed 24 percent of State Street's net income last year, up from 21 percent in 2005.

Logue also has moved aggressively into Asia and says he wants the company to earn half its revenue from foreign operations, from 43 percent today.

He says there's nothing flashy about his approach. "I don't think a lot of this is unique to State Street; a lot of it is what we learned in graduate school," Logue says. "The question is execution, growing the fastest in the fastest-growing markets. That's not an earth-shattering statement."

Challenges for State Street remain, not the least of which is showing that it can integrate Investors Financial, which also will mean the loss of about 1,700 jobs over the next several years.

ROSS KERBER