Since the emergence of “Modern Portfolio Theory” and the “Capital Asset Pricing Model” in the late 1960s, institutional investors have taken a quantitatively driven approach to portfolio construction, looking to create portfolio diversification and obtain better risk-adjusted returns by balancing their asset-class exposures. This journey has seen several important advancements in thinking about how to optimally achieve desired results.
Funds that want to take the total portfolio approach first need to get the total portfolio view. To do that they not only need data – and lots of it – but a rock-solid understanding of exactly how they’re going to use it.
‘Value, scale and efficiency’: Challenger goes front-to-back with State Street
State Street has been selected to provide custody and investment administration services to the entire Challenger group, including its multi-affiliate platform Fidante, fixed income platform Challenger Investment Management, and Challenger Life, its annuity product provider.
Challenger will also be one of the largest investment managers in the region to deploy State Street Alpha, its asset servicing platform integrating front, middle and back office services.
“This partnership is very important for State Street,” said Stefan Gmuer, State Street head of Asia Pacific and head of strategic business growth. “The mandate reaffirms our front to back proposition which brings value, scale and efficiency to our clients who are looking to accelerate their own growth and transformation. It also further cements our position as a leading provider of choice for large, sophisticated transactions.”
As part of the mandate, about 100 Challenger staff will transfer to State Street to provide administration services support for Challenger’s suite of listed and unlisted investment vehicles. David Mackaway, the chief executive of Artega Investment Administration – a venture majority owned by Challenger – will also join State Street along with members of his management team.
“State Street has a strong track record in servicing investment managers and institutional clients.” said Nick Hamilton, managing director and chief executive officer of Challenger. “Their leading technical capability, platform investment and global footprint will support our business and affiliates to help execute on the significant opportunity ahead, at the same time as delivering a high-quality service and innovation for our affiliates and clients.”
The mandate marks the latest in a series of wins for State Street’s antipodean arm, with the custodian recently taking on the business of Australian Ethical, Brighter Super and Australian Retirement Trust.
“As we welcome Challenger as a new partner, we are excited to be adding a large number of talented and experienced investment management and fund administration professionals to our team here in Australia,” said Tim Helyar, Australia country head at State Street.
“By growing our talent pool, we are enhancing our capacity to meet and exceed the increasingly complex needs of our clients in Australia. We will continue to invest and strengthen our servicing capability as part of our commitment to the Australian market.”
