The role of investment managers also acting as custodians for their clients is a long-standing practice in European markets. Mercer in its recently published guide European Pension Fund Managers looked at the managers who also provide custody services.

That the investment arms of major global custodians rank high in the listing may come as little surprise and the table confirms the dominance of the US groups in the worldwide figures, again no surpise.

Despite the trend to appoint specialist independent custodians, Mercer says the vast majority of pension plan sponsors in Europe continue to use the custody arrangements by an associate of their investment manager.The consultants do note the move to a wish for greater transparency", by disentangling the investment manager from custody."

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