JP Morgan has won a lucrative contract to be the custodian of three major NSW Government investment funds, in a deal that is tipped to save the state $80 million over the coming decade.

NSW Treasurer Gladys Berejiklian announced on Monday that JP Morgan will now provide custodial services for the investment assets of NSW Treasury Corporation (TCorp), SAS Trustee Corporation (State Super) and Insurance and Care NSW (icare), which was previously known as the NSW WorkCover scheme.

Treasury paid KPMG $1.4 million in consulting fees to help it choose a new custodian. The value of the JP Morgan contract has not been disclosed. The deal remains subject to final contract negotiations.

State Super already used JP Morgan as its custodian, but TCorp and icare had other providers – BNP Paribas and State Street, respectively. TCorp has $70 billion in assets under management, making it the fourth-largest distinct institutional fund in the country.

The Treasurer said the appointment of a common custodian was part of an ongoing general review and efficiency drive from the NSW Treasury, seeking the optimal mix of providers for the three agencies.

Eighteen months ago, Berejiklian officially recognised the combined investment operations of State Super, TCorp and icare, following a yearlong process of merging the front- and middle-office functions to create a 45-person team based in Governor Phillip Tower, Sydney. Legal firm Allen & Overy also advised on the project.

In September 2016 it was announced a new chief investment officer role covering the three entities will be revealed in early 2017.

Responsibility for the investment objectives, risk management and asset allocation of the funds remains with each of the separate entities and their respective boards.

Treasury estimates the appointment of a single custodial services provider for the three funds will drive $80 million in cost savings over 10 years. Berejiklian said the move would deliver better value for the NSW taxpayer, a “more unified picture” of the state’s investment positions and best-practice financial management.

“This selection delivers on our ongoing commitment to [provide] better value to the people of NSW by eliminating unnecessary duplication,” she said.

JP Morgan is the biggest provider of custodial services in the country, having ousted the National Australia Bank owned NAB Asset Servicing from top spot in 2016.

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