Iceland’s second-largest pension fund has chosen JP Morgan as the new custodian of its foreign assets portfolio, switching from Brown Brothers Harriman (BBH) as its requirements changed alongside considerable growth in the size and complexity of its overseas investments.

JP Morgan announced on Wednesday that it had been appointed by the Pension Fund of Commerce (Lífeyrissjóður verzlunarmanna, LV), to provide a range of asset services including global custody, fund accounting, foreign exchange, performance, risk and compliance reporting services, across LV’s securities portfolio.

The US firm said it was formally mandated by the ISK1.46trn (€10bn) pension fund at the end of 2024 following a tender, with portfolio transitions taking place this year.

Arne Vagn Olsen at Iceland’s Pension Fund of Commerce

Arne Vagn Olsen at LV

Arne Vagn Olsen, LV’s chief investment officer, said: “We chose JP Morgan as our partner due to their broad service offering, international experience, and solutions that can grow with us into the future.”

He told IPE the decision to switch from BBH was not due to any single issue, but rather the result of an evolving set of requirements and a competitive review.

Explaining the rationale for the change, he said: “LV’s portfolio has grown significantly in size and complexity in recent years. Approximately half of the fund’s assets are now invested abroad, across listed equities, credit and alternatives.”

This development had increased the pension fund’s demands in areas such as reporting quality, transparency, risk analytics, and operational integration, he added.

“We required a custodian that could support us across a broader service offering and adapt to our long-term needs,” the CIO said.

Vagn Olsen also said the partnership with JP Morgan was part of a broader effort to future-proof the pension fund’s operational infrastructure, and support its continued growth in the coming years.

Read the digital edition of IPE’s latest magazine