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Special Report

ESG: The metrics jigsaw


Managing your custodian

IPE has teamed up with Amaces, a UK-based provider of analytical and benchmarking services to pension funds and fund managers, to give readers an insight to performance standards within the securities services industry
On a quarterly basis, Amaces will provide IPE with a table of live data drawn from its Key Performance Indicators (KPI) statistics, which cover a range of services that are typically provided within the securities services marketplace.
These figures are derived from the firm’s CMS service covering custody and treasury services and are taken from the most recent report that Amaces has sent to its clients. As at March this year, there were 44 clients subscribing to this module of CMS, of which 23 were pension funds.
The KPI figures in the table refer to those pension funds data only and are the trailing three-month averages of these funds.
The table shows the best and worst experience of funds on the basis of these KPI figures, with a brief note to explain each of the key indicators given below.
James Economides, director of Amaces, explains: “The concept is to allow pension funds a way of regularly monitoring their service provider and comparing their experience with the experience of their peers or other clients in the universe.
“The process enables a pension fund to ask why the service they are getting is deteriorating, who is causing it and what can they do to improve it.
“The range of performance counters the perception out there that, to quote a Dutch pension fund,
‘custody – it’s just like petrol. It’s all the same and it’s just a matter of price’. There are significant variations between clients, some of whom may be serviced by the same custodian.
The KPI statistics will be of value to custodians as well as their clients, Economides says. “No custodian has got these universal peer group comparisons so it’s a value to them in being able to hopefully more effectively manage their pension fund clients.
“What we’re trying to do is bring transparency to all areas of the service, and transparency is a two-edged sword. If the custodian is doing a super job it will highlight this. If they’re not doing a good job in certain aspects of the service and they don’t fix it, that’s a problem.”

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