The CHF4.25bn (€3.8bn) pension fund for the CERN institute in Switzerland has appointed Northern Trust as its new custodian.
Matthew Eyton-Jones, chief executive officer of the pension fund, said the appointment followed an extensive review and tender process. Eyton-Jones was re-appointed as CEO for another three-year term starting in July.
Northern Trust will take over from State Street in Munich, which had been the pension fund’s custodian for 24 years.
Eyton-Jones noted three major factors were considered as part of the pension fund’s review.
One was custody technology, with the pension fund wanted to make sure it was using the best available.
Fees were also considered: “We wanted to make sure we were getting value for money as part of our strategy of reducing our overall fee levels and the process also formed part of a routine tender process,” said Eyton-Jones.
Last year the pension fund “internalised the sourcing and the investment due diligence” to save on costs, as noted in its 2017 annual report. Operational due diligence remains outsourced.
The ability of the new custodian to deal with alternative asset classes also formed part of the pension fund’s selection criteria, Eyton-Jones told IPE.
The CERN pension fund has a widely diversified alternative asset base.
At the end of the first quarter this year, alternatives – excluding private equity – formed 12% of the portfolio and private equity another 7%.
The alternatives exposure mainly comprises hedge funds but also commodities and private debt.
In a separate development, the CERN pension fund this year appointed Jacob Bjorheim as the new external expert for its investment committee, concluding a search initiated in 2017.
Bjorheim replaces Pierre Sauvagnat, who had served on the investment committee for a six-year term.
Bjorheim is lecturer in the Faculty of Economics and Business at the University of Basel and visiting fellow in the Department of Banking and Finance at the University of Zurich.