One of London’s local authority schemes has dropped custodian BNY Mellon in favour of Northern Trust, marking further gains for the company on the back of a national procurement framework.
The £964m (€1.2bn) City of Westminster Superannuation Fund appointed Northern Trust after a joint tender with the London Borough of Hammersmith and Fulham Pension Fund, which already employed the company as its global custodian.
The two boroughs currently cooperate with Kensington and Chelsea in running a tri-borough treasury to reduce administration costs across the three pension schemes, although Hammersmith and Fulham recently announced a review of the arrangement.
According to recent committee minutes from the £765m Hammersmith local authority scheme, the two funds appointed Northern Trust through a national custodian framework.
Norfolk County Council was the authority behind the national local authority pension scheme (LGPS) framework, which in November last year appointed six custodians including Northern Trust, State Street and BNY Mellon.
The arrangement allows LGPS to appoint custodians from the pre-approved list without the need for the full and time-consuming public tender process, with the approach also employed to offer funds a panel of investment consultants.
Penelope Biggs, head of Northern Trust’s institutional investor group for the EMEA, said the appointment came at a pivotal time for local authority funds, which were “increasingly looking to become more efficient and cost-effective”.
“We are very proud to have been appointed by Westminster City Council and are delighted to extend our relationship with the London Borough of Hammersmith and Fulham,” she added.
The London Borough of Hackney, meanwhile, joined Norfolk and Suffolk in appointing HSBC as custodian, another provider that is part of the framework.