There are fewer super funds, and associations that represent them, than ever before. But multiple layers of industry representation working at cross-purposes means that true unity has remained elusive, according to the Financial Services Council.
The world’s largest sovereign wealth fund just made its largest return ever. But the probability of extreme market events has “arguably risen”, and it’s carrying out stress tests for a more uncertain future.
BNP Paribas takes all at Insignia Financial
It was a “Steven Bradbury-style win” for BNP Paribas, which has taken on full custody of the amalgamated Insignia Financial after being brought in as a stalking horse to get the cost down in MLC’s negotiations with J.P. Morgan. MLC was looking for a new home as NAB Asset Servicing (NAS) winds down, but J.P. was apparently tripped up by its ongoing issues with its transition from HiPortfolio to a system it calls WINS (a rebranded Sungard InvestOne) and wasn’t able to commit to MLC in a timely fashion, focusing instead on bedding down existing clients.
The tender process was carried out by external consultant Drew Vaughan. J.P. were “practically told they’ve got it and everybody wanted them”, according to one source, and it flew a number of execs down from US headquarters to seal the deal. Its main problem with the transition to WINS has been building out the tax engine, particularly on capital gains tax, which HiPortfolio “grew up on and knows warts and all”. It’s been a sore point in its relationship with some of its largest super fund clients.
Down Under, BNP isn’t as popular as some of the American custodians, but it’s considered by some to be better at aspects of ESG reporting owing to its European heritage, where the conversation is significantly more advanced. Its ESG advantage also stems from investment data platform Manaos, which it designed and incubated itself. It’s thought of by some members of the local market as slow but reliable, and is headed up locally by Daniel Cheever (pictured).
There is some nuance to the headline, owing to the various businesses that Insignia is made up of, which have all had their own custodial relationships. BNP already had IOOF; JPMorgan was taking care of some of the ANZ businesses IOOF had picked up (which are also going to BNP); and MLC was formerly the crown jewel of NAS. The deal should increase BNP’s assets under custody by around $200 billion.
NAS is still slated to wind down over the next couple of years but is now almost at the end of the 12-month period where it promised staff no redundancies. Citi had worked out a referral agreement for a select number of NAS clients but had counted itself out of the running for MLC several months ago.
Insignia was contacted for comment.
