At least one of the $30 billion plus Accident Compensation Corporation (ACC) investment fund’s two custodians is set to lose out as the government-owned entity tidies its back-office.
In a winner-takes-all contest, ACC’s incumbent custodians – JP Morgan and Northern Trust – will have to fend off external applicants as well as each other to secure the single custody position on offer. Industry sources tipped JPMorgan as the front-runner.
“ACC Investments currently utilises two custodians – JPMorgan for our Australian and New Zealand portfolios and Northern Trust for our global portfolios,” an ACC spokesperson said. “Based on our future business needs, ACC has decided to tender a contract for one custodian to provide custody and fund administration services for all our investment portfolios.”
While the tender closed last August, the spokesperson said the winner would not be revealed until “in or around July 2015”.
In its tender brief, the ACC said it was seeking a “forward thinking custodian with a global business model that has the ability to support ACC locally and bring new ideas to enhance ACC’s investment operating model”.
As well as the incumbents, probable applicants for the expanded ACC custody contract include BNP Paribas and State Street.
Northern Trust recently celebrated 20 years providing master custody services to the ACC fund with the Chicago-based firm also picking up the New Zealand Superannuation Fund (NZS) custodial role in 2007.
JPMorgan replaced Trustees Executors as ACC’s Australasian custodian in 2008.
According to the most recent NZ government accounts, the ACC fund recorded assets of $31.5 billion compared to NZ Super’s $28.1 billion.