GERMANY - State Street is rumoured to have won a multi-billion euro custody mandate from European defence and aerospace firm EADS.

State Street declined to comment, as has a spokesman for EADS in Munich, but according to the market rumours, State Street will act as the custodian for several billion euros in pension and treasury money from EADS.

If State Street indeed has won the EADS mandate, it would mark a turnaround in its fortunes. Last year, the US financial firm lost mandates for custody of pensions money from Siemens, the German technology firm, and the Ärtzeversorgung Westfalen-Lippe (AEVWL), a €7bn pension fund for German doctors.

At that time, the mandate from AEVWL went to JPMorgan Chase following a beauty contest among global custodians.

Beyond its custodial operations, State Street is one of the biggest foreign managers of institutional assets in Germany, running €12bn at last count. Of this volume, 60% comes from pension funds.

The pension money EADS is said to hand over to State Street likely stems from a contractual trust arrangement (CTA), or an external pension fund.

IPE reported last December that EADS was considering setting up the vehicle to finance €4bn worth of pension liabilities on its balance sheet (see earlier story: EADS considers external pension fund)

While this was not confirmed by EADS, well-placed sources told IPE at the time the plans to build a CTA were well-advanced. Sources said earlier it was seeking a consultant to advise on the fund's investments and as well as a provider of German ‘master funds'.
In this case, the master funds would centralise back-office administration of the CTA's investments to cut cost and maintain transparency.