Auckland-based fund administration firm MMC has landed its first custody client after launching the service earlier this year.
Tom Reiher, MMC chief, said the firm went live with foundation custody client, the Mint Core Equities Fund, in the last fortnight.
“We’ve been looking at adding custody for a while and have just launched with one relatively small client,” Reiher said. “A few other clients have also expressed interest.”
He said the MMC custody service was targeted at small-to-medium clients who were not large enough to deal direct with major custodians.
MMC has hired NAB Asset Servicing as sub-custodian.
“We’re a custody aggregator for those clients who can’t go direct,” Reiher said. “Over the years we’ve been asked by a number of our clients to provide custody – it’s a risk management and efficiency opportunity.”
While custody was unlikely to be a big money-spinner, he said offering the service provided efficiencies for both MMC and clients.
He said the arrangement also suited NAB Asset Servicing, which would access a range of NZ clients via the single MMC access point.
In 2016 the Wellington-headquartered investment platform, Adminis, brokered a similar deal with BNP Paribas Securities Services as sub-custodian. At the time Adminis, which has range of platform clients including Perpetual Guardian, hired Public Trust head of custody, David Campbell, to run the new service.
Rebecca Thomas, Mint Asset Management chief, said the MMC custody contract currently applies only to the firm’s Core Equities fund – launched to accommodate the recently-acquired NZ shares mandate for the BNZ KiwiSaver scheme.
However, Thomas said Mint was reviewing custody requirements for its existing funds, which use Public Trust in the asset safe-keeping role.
Reiher said MMC planned to bed down the Mint custody service before bringing on other clients.
“If we can get at least $1 billion under custody it will have been worthwhile,” he said.