EUROPE – Watson Wyatt is upping its focus on custody service within the European pension fund market by setting up an agreement with Thomas Murray, the specialist custody rating, risk management and research firm.

Thomas Murray has agreed to promote custody ratings and operational performance reports to Watson Wyatt’s pension fund clients across Europe. The alliance is aimed at providing European pension funds, trustees and institutional investors with a comprehensive custodian selection and ongoing monitoring process.

Watson Wyatt will integrate Thomas Murray’s PROBE (Private Ratings and Operational Benchmarking Evaluation) product into its monitoring process of custodians.

PROBE is a business rating that assesses the operational performance of global custodians on the familiar AAA to C rating scale.

Simon Thomas, chief executive officer and chief ratings officer of Thomas Murray said: “PROBE helps pension funds, mutual funds, asset managers and other users maintain surveillance on their custodians to ensure that they meet appropriate levels of asset protection and risk minimisation while supporting individual service requirements.”

The methodology considers not only the business credentials and service capabilities of global custodians, but also the quality and effectiveness of their operational infrastructure, and their willingness and ability to protect their clients from losses.

Says Brian Hill, European head of Watson Wyatt’s custody consulting said; “We hope that our offering is well received, particularly by pension fund trustees. We believe it will make it easier for them to comply with market best practice, Myners’ recommendations and developments in the supervision of financial markets.”