BNP Paribas Securities Services (BNP PSS) has been successful in two recent master custody tenders.
The $1.5 billion Aon Master Trust began using BNP PSS at the start of the financial year, after an internally-run tender preferred it to ANZ Custodian Services. Meanwhile, the $500 million Health Industry Plan (HIP) recently selected BNP PSS as its first master custodian for many years, following a JANA-led review in which National Custodian Services was shortlisted. HIP’s previous relationship with State Street Investor Services fell apart over pricing, shortly before the Boston-based firm exited the master custody game in 2000 (only to return last year). HIP has been restricted to pooled investments and reliant on internal custodianship in the years since, however fund secretary Ross Bernays said the fund’s growth and proactive investment strategy would probably see it require discrete mandates soon. BNP PSS began providing custody and performance analytics services to HIP in early November. Bernays said a measure of the depth and sophistication of Australia’s master custody market today was that BNP PSS’ fee would be about half what State Street had proposed charging before that relationship broke down at the turn of the century.
A managed investment scheme holding 20 per cent or more in unlisted assets is deemed an illiquid scheme and is restricted from providing frequent liquidity, but there is no formal limit on how much super funds can allocate to these asset classes. The Conexus Institute writes this is a special privilege given to APRA-regulated super funds that should not be taken for granted.
David Bell and Geoff WarrenFebruary 6, 2025
