USS restructures its custody arrangements
he UK’s £26bn (€38.5bn) Universities Superannuation Scheme (USS) has awarded ABN AMRO Mellon Global Securities Services a £5bn global custody, cash management and securities lending solutions mandate, while the fund re-appointed JPMorgan as custodian for £24bn of its assets.
The move follows USS’s 2005 review of all its custody arrangements, which was subsequently placed on hold early last year during “a comprehensive evaluation of investment strategy”, according to a release. Following that review, the custody request for proposal process was resurrected, with Thomas Murray acting as consultants.
Colin Hunter, chief financial officer at USS, said that the scheme was “particularly attracted” to ABN AMRO Mellon’s securities lending capabilities and the firm’s technology platforms, adding: “ABN AMRO Mellon’s capabilities in the specialised area of lending auctions were a key determining factor in their appointment.”
With regards to the recently announced Bank of New York-Mellon meger, Hunter said the fund was happy with the reassurances that were given regarding the impact of the deal.
JPMorgan Worldwide SS has provided custody services for USS since 1995 and is currently mainly responsible for assets which are internally managed by USS.
“The re-appointment reaffirms our market position as the leading provider of custody services in the UK pension sector,” commented Francis Jackson, head of business development and relationship management at JPMorgan.
USS is the principal pension scheme for staff of universities and other higher education and research institutions in the UK, is one of the country’s largest private sector pension schemes with over 390 participating institutions.