State Street Corp. will be the new custodian for Sunsuper after beating incumbent National Australia Bank Ltd. for a contract worth $25 million over five years.
The $19 billion Brisbane-based Sunsuper choose State Street because of the Boston-based firm’s superior middle office services. State Street and National Australia Bank’s back office services were judged as being little different.
Sunsuper’s decision brings its 13-year relationship with National Australia Bank to a close. Mercer Sentinel oversaw the tender that lasted eight months.
“The need for detailed reporting and analytics was at the heart of the change,” says Tony Lally, chief executive officer of Sunsuper.
Custodians typically earn fees for asset safekeeping and reporting. They can also gain income from administrative tasks such as cash and foreign exchange management. Lally says the fee State Street earns may change if the fund grows in size.
The Sunsuper contract is State Street’s second major win this year. In January, State Street beat JPMorgan Chase & Co. to provide custodial services to REST Superannuation, a $20 billion fund.
National Australia Bank lost the Military Super custody contract when the $4 billion fund completed its merger with Commonwealth Superannuation Corp., a $19 billion fund.
It retained the custody contract of Club Plus Superannuation, a $1.3 billion fund, in August.
Lally expects the transfer of Sunsuper’s assets to State Street to be completed before June 30, 2012.
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