Shell pools pension assets and taps JPMorgan for custody
GLOBAL - Anglo-Dutch oil giant, Royal Dutch Shell has decided to create a single pension pool for its $70bn (€44bn) pension and insurance assets globally, appointing JP Morgan to provide custody services around this new pool.
Apart from custody, JPMorgan will also provide accounting, administration and certain securities lending services for all segregated and pooled accounts managed by Shell Asset Management Company (SAMCo), the asset management arm of Shell.
SAMCo is creating a single Dutch-registered FGR under UCITS-III regulation, which makes it passportable under all the jurisdictions worldwide, according to Francis Jackson, head of EMEA business development and relatiopnship management for JPMorgan.
"While they are pooling those assets, we are able to identify the assets within the pool at the beneficial owner level, so we can provide tax transparent pooling and at the same time, which is different, we can lend those securities out of the pool and attribute all the lending revenues to that beneficial owner," Jackson told IPE today.
In addition, JPMorgan, which already has the assets under custody, will deliver so called enhanced, value-added services, and is currently working with Shell to launch the pools in September.
"We specifically had to design the main pool in conjunction with all their tax jurisdictions - and they are truly global, since they have operations in for instance Bermuda, Canada, the US, and even in Kazakhstan - and for us it was a strategic capability build," Jackson said.
He added that Shell can now treat all its underlying pension funds in the same way, since every pension fund, regardless of its size, can apply the same investment processes, and ultimately reap the same benefits.
The asset manager brands its offering to Shell as a "landmark" deal, because it believes its offering is more sophisticated than other products currently on the market, and it is the first time that the company offers this kind of services to a multinational.
SAMCo, which gives investment advices, selects external mangers and performs in-house asset management with regards to some $60bn in Shell related defined benefit funds, has been tasked to comment about the mandate, but was not immediately available for comment.
JPMorgan Investor Services is part of JPMorgan Worldwide Securities Services has $15.7trn in assets under custody and $4.6trn in assets under administration.
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