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USS puts €32bn of custody under review

UK – The £22bn (€32.4bn) Universities Superannuation Scheme is reviewing its entire custody arrangements with the help of consulting firm Thomas Murray.

“Yes, I can confirm that we are conducting a review on behalf of USS,” said Thomas Murray’s director of investor services, Joanne Parker.

“The whole custodian side is up for review,” she told IPE, when asked whether one or both custodians were under scrutiny.

JP Morgan Investor Services and State Street Bank & Trust Co. are the fund’s current providers. Market sources have suggested that USS, the main scheme for the UK’s universities, is having wide-ranging discussions with potential providers.

USS declined to comment on the tender. “I have no comment. I have nothing to say to this,” said deputy chief investment officer Clive Edwards.

State Street also declined comment. “We have no comment on the USS business. We can confirm that we are custodians of USS,” said a spokesperson. JP Morgan said its policy was not to comment on business which is under review.

According to Parker, the “closed tendering process” started in early June. “USS approved a short list group of custodians to send their RFP. It was a competitive review process, and the RFP was issued in August. Thomas Murray and USS are currently assessing the propositions received.”

In May this year Thomas Murray was consultant to the £740m (€1.08bn) West Sussex County Council Pension Fund, which appointed State Street as exclusive custodian.

Yesterday IPE reported that the fund is to assess fund managers using a behavioural finance tool, called Behavioural Performance Strategies.

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