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.
JP Morgan wins out in ACC custody battle
Bryan Gray
JP Morgan has won the unified custody and securities servicing role at the NZ$30 billion-plus Accident Compensation Commission of New Zealand fund, knocking Northern Trust out of a job in the process.
According to an ACC spokesperson, the transition of Northern Trust-held assets to JP Morgan – amounting to about NZ$5 billion of global securities – should be completed before the end of this year. Under the previous custodial arrangements, JP Morgan managed ACC’s Australasian assets – which represent more than 80 per cent of the fund – while Northern Trust took care of the offshore component.
It is understood the fund’s total custody fee rates will drop as a result of the JP Morgan deal, however, the ACC spokesperson declined to quantify the cost savings. “ACC is pleased with the strategic commitment that JPMorgan demonstrated as part of the procurement process,” the spokesperson said. “ACC will benefit operationally by having one custodian but the price is obviously commercially sensitive.”
ACC began its search for a single custodian almost a year ago, with JP Morgan quickly emerging as a front-runner. “There was a full procurement process which was openly contested and contained a number of different criteria,” the spokesperson said. “These criteria covered operational, organisational and commercial qualities. The decision was made based on JPMorgan’s overall position in these categories.”
JP Morgan is also the custodian for two other Crown Financial Institutions: the $4 billion Government Superannuation Fund, and, the $1.8 billion National Provident Fund.
New Zealand-born Bryan Gray, JP Morgan Investor Services head of sales and client management Australia and New Zealand, said the appointment came during an important period in the execution of [the ACC fund’s] strategic business plan.
“JP Morgan has proven throughout this process that we can service the immediate and future needs of ACC,” he said. “Our global networks combined with local market knowledge and investment in technology and solutions, positioned us well to extend our partnership with ACC.”
– David Chaplin, Investment News NZ
