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State Street wins David Smith custody brief

UK – The 800 million-euro pension scheme of packaging firm David S Smith has awarded a global custody mandate to State Street Corp.

State Street said in a statement the appointment “consolidates the previous DS Smith Group Pensions relationships with Deutsche Bank and JP Morgan Chase”.

State Street bought the Global Securities Services arm from Deutsche Bank in 2003 for 1.5 billion dollars.

A spokesman for J P Morgan said the bank didn’t have a direct relationship with the fund, as the assets would have been held via pooled accounts.

“We are looking forward to State Street meeting all of our requirements as we migrate to a new investment fund structure with one provider acting as our global custodian,” said Caroline Forsyth, group pensions manager at DS Smith

She added: “We do not wish to comment further on our decision, safe to say this was not a performance issue.”

The fund has also taken WM Co., which become part of State Street in the Deutsche deal, for performance measurement. According to “International Pension Funds and their Advisors 2003” the fund’s incumbent performance measurement advisor was Russell/Mellon CAPS.

“David S Smith takes performance measurement services from us and we have not been informed that we have lost the business,” said Mick Brant, chief executive of Russell/Mellon CAPS.

“If we have lost the business, it is likely that this is a result of State Street bundling the performance measurement services as part of a wider custody services deal.

“The performance measurement is often not subject to a separate bid process in these situations.”

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