This year’s top 10 stories included a peek into AustralianSuper’s international equities build out in London, AMP’s move to slash employee benefits, and plenty of hard-hitting analysis of the issues that matter in institutional investment. But the real story is how readers helped shape all of that coverage.
Orbis’ Stuart Place is riding from Melbourne to the Moon and Back to fund a treatment for the “monster of a disease” that his youngest son was born with. The investment industry is rallying behind him.
HSBC recruits for major move on custody
HSBC has recruited a State Street custody veteran as part of a long-planned expansion of its own business.
Sinclair Scholfield has been appointed head of sales and client management for HSBC’s Securities Services business in Australia and New Zealand. Scholfield spent the last 18 years at State Street, where he was most recently head of platform solutions for Asia Pacific.
“We’re excited to have Sinclair join our team, where his high-calibre experience in institutional asset servicing, global markets and technology will prove a real asset for the bank,” said Enzo Cotroneo, head of securities services for Australia.
“Sinclair will focus on ensuring that HSBC is at the forefront of key trends and the requirements in the Australian and New Zealand markets, and maintaining regular dialogue with industry contacts so that the market is kept up to date on the latest HSBC capabilities.”
The appointment is a signal to the market that HSBC is becoming a player in the more lucrative part of the custody world – master custody – and potentially the full front-to-back administration service, where State Street, alongside J.P. Morgan and Northern Trust, has taken a leading position. Cotroneo began a search for senior staff for the rumoured expansion of the firm’s custody services offering in Australia pre-Covid.
Historically, State Street was the company that introduced master custody to Australia when it opened its first office in Australia in North Sydney in 1986. The firm raced away with most of the then-nascent market, until competitors like J.P. Morgan from overseas and NAB in Australia chipped away at its market share.
This coincided with the opening of the Australian office of Russel Investments – one of the main drivers behind the appointment of specialist asset class managers for portfolios. Up until then, super funds had mostly used balanced managers. That played into master custodians’ hands as funds switched away from unit trusts and towards specialist mandates – which changed the landscape of superannuation and brought them in line with the US, and ahead of the rest of the region and much of the world.
According to the latest statistics compiled by the Australian Custodial Services Association, for the periods to December 31, 2021, thanks largely to their master custody offerings, the top five in total assets under custody for Australian investors are, in order, J.P. Morgan, Citi, Northern Trust, State Street and NAB. HSBC is seventh, after sixth-placed BNP Paribas.
However, HSBC has for many years been a clear winner in sub-custody, with $1.43 trillion in assets in Australia for ‘foreign clients’ at December last, compared with Citi’s $212 million, J.P. Morgan’s $182 million and BNP Paribas’ $138 million of the top four. HSBC is by far the largest provider of sub-custody in Australia, including for State Street, which outsources sub-custody outside North America.
