After a competitive tender overseen by Mercer Sentinel, which seems to be dominating the securities services reviews by big super funds of late, Northern Trust has won the custody and associated securities and outsourced data business of Funds SA.
The $34 billion South Australian fund, which provides super services for a variety of state-government organisations, had been in partnership with JP Morgan for about 19 years.
Given the number of possible/probable fund mergers on the table, securities services reviews are on the wane after a frenetic level of activity over the past two years. There’s not much point in changing custodian if you are a chance of merging with another fund anytime soon.
The biggest tender likely to come up next is that of the rationalisation of its securities services providers by global manager Pendal Group. After a flurry of activity earlier this year, the Pendal tender is now considered unlikely to get underway until late this year or early next year. The consulting firms considered most likely to provide advice for the big Pendal job are Mercer Sentinel and Deloitte.
Angelo Calvitto, Northern Trust’s Australian head, said of the Funds SA contract: “We are delighted to be working with Funds SA to support their growing business and enable them to focus on their core investing activities. As institutional investors look to enhance their operating models to meet their investment needs, they require a global asset servicing partner with local insights and expertise. They also want to work with an organization that delivers a high-level of client service, supported by leading-edge technology.”