Schroders is outsourcing its London-based custody and funds administration services to Chase Manhattan Bank by transferring £75bn (e115bn) in assets to Chase’s Global Investor Services division by the beginning of October.
Schroders announced its intention to outsource last September and has since been running a beauty parade. “In this type of process there’s a huge amount of due diligence, hence the delay,” says Julian Samways, head of marketing. Schroders refused to disclose the number of shortlisted custodians, only that it was in single figures.
Outsourcing will allow Schroders to concentrate on its core business of investment management and client service. It will also enable Schroders to produce more sophisticated products and technology for its clients. Samways says they will focus on developing front-end systems like proprietary trading and risk management systems.
As part of the move, 200 staff will transfer from Schroders to Chase though Schroders stresses there will be no redundancies. Chase already acts as trustee and custodian for £25bn of Schroders’ unit trust and pooled vehicle assets world-wide and it is one of the world’s largest custodians, overseeing more than $6trn in assets. Samways says the existing relationship acted in Chase’s favour.