Despite being a growing reservoir of funds under management, this critically important pool of capital is confronting mounting problems collating and disseminating key data in a timely manner.
The ratings house is pinning its growth strategy on a revamped methodology that increases the emphasis on governance to 25 per cent – a timely move considering APRA’s proposed reforms.
Equip goes for ‘Star Chamber’ in custody review
Brian Keogh
Equipsuper has appointed Thomas Murray IDS to assist in a review of its custody and securities servicing contract as the sector continues to keep custodians and consultants busy with a record level of activity.
Thomas Murray, which is famous for its ‘Star Chamber’ quizzing of short-listed custodians, this year expanded in Australia with the appointment of two former NAB Asset Servicing (NAS) executives – Brian Keogh and Adam Zani – to head up a new office in Melbourne. The UK firm was previously represented from New Zealand.
NAS is Equip’s incumbent custodian and will no doubt get some strong competition from the other majors during the review process. Tender documents were sent out last week.
The ‘Star Chamber’ process has become a part of custody folklore after Thomas Murray made its first foray into the region through its advisory role for New Zealand Superannuation Fund in the early 2000s, followed by the Future Fund, both of which were won by Northern Trust, which subsequently set up a 100-person office in Melbourne.
While the process is thought to be somewhat tamer than it used to be, the bidders have to endure lengthy verbal questioning with limited time given to check their own facts.
Equip is one of Australia’s oldest industry funds, dating back to the 1930s and the early years of electricity generation in Victoria. It now has about $7 billion in assets and covers a range of industry sectors.
As previously reported, the biggest custody tender currently underway is that of the $65 billion First State Super, which will also involve some middle-office outsourcing. Incumbent there is JP Morgan.
Meanwhile, JP Morgan has to also defend two of its New Zealand clients, Government Superannuation Fund and National Provident Fund, which have assets totalling about A$5.5 billion. Those tenders, being run by the Government’s Annuitas, are not expected to be completed until next year.
