DISCLOSURE: This story has been updated. Details are provided after the final paragraph.

QSuper, the $32 billion superannuation fund, has chosen State Street over incumbent custodian National Australia Bank (NAB) following a six-month tender.

Michael Cottier, chief financial officer at QSuper, has confirmed that State Street has been awarded a five-year mandate to be custodian to the Brisbane-based fund.

The deal will see State Street provide services including unit pricing, compliance monitoring, alternative asset reporting and tax and accounting services. QSuper refused to disclose the fees it will pay State Street.

The fund informed NAB, its custodian since 2009, of its decision yesterday and was understood to formally explain its reasons for ending the relationship today. Cottier says State Street’s “breadth and depth of services, advanced technology and global capability” secured the mandate.

Thomas Murray, a London-based custody and capital market ratings business, ran the tender. Boston-based State Street, Melbourne-based NAB and New York-based JPMorgan were among the custodians invited to pitch for the QSuper contract.

QSuper, the 100-year old fund for Queensland government employees, is now State Street’s largest super fund client and increases its superannuation assets under custody to $80 billion.

NAB remains the largest custodian in Australia with about $507.8 billion in assets under custody.

In November 2011 State Street’s investment analytics enabled it to beat the incumbent NAB to become custodian of Sunsuper, the Brisbane-based $19 billion super fund.

NAB, which has provided custodial services since 1950, is the only major custodian headquartered in Australia. It is countering global competitors by partnering with offshore custodians to provide new services such as investment analytics and private equity administration.

Leigh Watson, executive general manager of NAB’s custody business, says the company has gained nine new clients in the past nine months, such as RAC Insurance.

“Our local presence and expertise, coupled with partnerships with global providers, is working,” Watson says.

Investment Magazine Online first learned of QSuper’s decision after obtaining an e-mail dated March 28 in which Brian Keogh, general manager of sales and relationships at NAB’s custody business, writes that State Street won the mandate.

DISCLOSURE: This story has been updated to include comment from QSuper. The fund declined to comment on the original story, which cited an e-mail written by a NAB executive as evidence of the deal.

Simon Mumme became a fnancial journalist through a stroke of luck. Upon graduating with a Master of Journalism from The University of Queensland in 2006, he set out to fnd a news organisation that would employ him as an overseas correspondent or business reporter. Or both, ideally. Conexus Financial hired the bright-eyed cadet, and in the ensuing years he wrote for all of its titles until being appointed editor of Investment Magazine in June 2010. Under his guidance, the magazine continues to dominate the Australian institutional investment media through its authoritative, insightful and engaging feature stories and analysis. Outside of work, Simon trains keenly in Muay Thai kickboxing, revels in the surf breaks fringing the Sydney coastline and reads as much high-quality journalism and non-fiction writing as he can. Committed to his role as a niche business reporter, Simon is aware that an overseas posting as a correspondent still eludes him. He hopes Conexus can help him with that career goal too.
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