Surging equity markets have driven the Future Fund’s return higher, but its prediction that inflation will be stickier than expected has been born out and it “remains conscious of the potential for significant deterioration”.
A number of super funds managing less than $10 billion have been slugged with an increase in their restricted APRA levy of more than 80 per cent even as the regulator pushes them to keep costs down.
J.P. Morgan on a roll with CareSuper win
Following its re-signing by Telstra Super in July, J.P. Morgan has won the asset servicing business of the $16 billion CareSuper away from incumbent NAB Asset Servicing. Both were competitive tenders, but the latest decision was more of a surprise. And it was a long, drawn-out process.
A statement from Care last week (August 19) said J.P. Morgan would provide custody and fund administration services including investment reporting, with a transition planned for the first half of 2021. With the Telstra Super deal, it is known that the fund looked to get new and additional services from the custodian, which is becoming a common theme in custody tenders. Drew Vaughan, principal consultant of specialists Dymond, Foulds & Vaughan, oversaw both custodian reviews. The statement said that J.P. Morgan’s offer was to “align with CareSuper’s investment program and strategic plans for future growth”. A spokesperson for J.P. Morgan declined to elaborate on any further aspect of the arrangement.
The tender process stretched out about 15-16 months, from early last year. While they can be time consuming, with six-nine months the norm, a longer process in an asset servicing tender usually, but not always, means that price became an issue. The short list presented to Care consisted of NAB and J.P. Morgan. An early favourite according to the industry scuttlebutt, Northern Trust, did not get to the final round.
Julie Lander, Care’s chief executive, said in the statement: “As part of our tender process, we wanted a custodian that could demonstrate how it could align both culturally and with the strategic growth initiatives of our fund… We have enjoyed a close partnership with NAB Asset Servicing to date and thank the team for their dedication to our fund over the past 20 years.”
Suzanne Branton, the fund’s CIO, said: “J.P. Morgan’s global scale and data-driven approach to securities services are particularly well placed to support our evolving investment program. The increasing sophistication of the program, including its diversification into private assets across international markets, means J.P. Morgan’s capabilities will support our service needs.”
– G.B
