UK – F&C has announced it is in exclusive discussions to outsource the administration of its 60 billion-euro institutional business to Mellon Global Securities Services as it focuses on asset management and client relationships.
Following a beauty parade, Mellon has been chosen to take on the back-office investment administration for all of F&C’s institutional business, subject to a consultation period, announced the asset manager today.
The terms of the proposal will result in around 95 of F&C’s London-based administration staff transferring to Mellon Global Securities Services as of September this year.
Explaining the decision to outsource the administration side of the institutional business, Robert Jenkins, chief executive of F&C Management, said: “A number of leading asset management houses have already made such a move and I have no doubt that many competitors will soon follow.
“By acting now, we have been able to secure preferential treatment. Meanwhile, we will be able to focus on our main objective, which is portfolio management."
An increasing number of asset managers are outsourcing their back-office businesses in a bid to focus on core areas such as investment and client relations, which is hotting up competition between the five big providers, Bank of New York, J P Morgan Chase, State Street, Citigroup and Mellon itself . Last month Standard Life Investments announced its intentions to hand over administration to Citigroup.
F&C's decision to enter into exclusive discussions with Mellon builds on an existing mandate to provide transfer agency and fund accounting services to F&C, which has been in place since 1989. “The decision is founded on F&C's confidence in the robustness of Mellon's technology platforms and its past experience of Mellon's commitment to a high level of client servicing,” said the company.
Mellon Global Securities Services is the investment administration arm of US company Mellon Financial Corporation. Mellon has approximately 2.9 trillion dollars in assets under management, administration or custody.