Global custodian Northern Trust has launched a service which will allow the corporate headquarters of multinational pension funds to keep a closer check on their subsidiaries' investments. 'Headquarters Reporting', forms part of an existing reporting package provided by Northern Trust - Passport - and will be marketed to the headquarters of their multinational clients worldwide.

Lucille Knapp at Northern Trust says: The idea of this is to recognise that headquarters may want a different kind of reporting to individual country plans for a variety of reasons. Not all corporations have centralised responsibility or even an interest in looking at all the pension funds around the world, some of the larger multinationals do have that sort of internal structure and this is more in response to that."

Northern Trust currently has in excess of $100bn assets under custody on behalf of multinational clients, and Headquarters Reporting which also incorporates risk management and performance data on individual pension plans, will also be available to those schemes who do not currently use Northern Trust as their custodian.

"This does actually require a bit more work," admits, Knapp, "And it depends very much on the pension funds involved or even the countries involved, how sophisticated they are. If you have got a small pension fund in an emerging market the chances are they are going to send us their portfolio data by fax for inclusion. Whereas the funds in more sophisticated markets will ideally send us a file transfer. So we have built this to be pragmatic and practical."

Many multinationals have long now been trying to find ways of unifying their investments and centralising the control of the worldwide schemes, though Knapp sees one of the real driving factors behind the demand for such a service being the fact that pension funds are getting to a size that headquarters are realising the need to keep a closer eye on the asset flows of their subsidiaries. "It may be just more that the quantity of assets is getting so big now. Initially the headquarters had the biggest pension fund but now you look at how much the corporation as a whole has around the world, and those responsible are asking themselves 'shouldn't we be taking a closer look at this?'" Rachel Oliver"

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