RBC Dexia and Northern Trust have been awarded new mandates in the pooled fund space.
RBC Dexia Investor Services has been appointed by BIMCOR Inc, the pension fund investment manager, to provide custody, fund administration and securities lending for BIMCOR’s North American pooled funds for the next five years.
“We appreciate the value RBC Dexia has brought to our business throughout the duration of our longstanding relationship, said Michael Boychuk, President and CEO, BIMCOR Inc. “RBC Dexia’s expertise in servicing pooled funds and diligence in supporting our securities lending program is strong. We look forward to our continued relationship.”
“We are pleased to be entrusted with servicing BIMCOR’s assets and providing a stable securities lending program,” said John Lockbaum, Managing Director, Canada for RBC Dexia Investor Services. “The renewal of our mandate further strengthens our global franchise and we are pleased to be working with an investment manager of BIMCOR’s calibre.”
Northern Trust has been selected by Nestl to provide an asset servicing solution for its new Common Contractual Fund (CCF). Services that will be provided by Northern Trust include custody, fund administration and performance reporting. In addition, Northern Trust provided project management, and tax and legal experts who assisted in the funds successful launch.
The Ireland domiciled CCF is a recognised tax-transparent, cross-border, asset pooling vehicle designed to enhance investment performance, governance, oversight, administrative control and investment management decision-making. The fund is open to Nestl pension plans around the world and, at launch, plans from several countries will be investing.
Northern Trust is a leader in tax-transparent asset pooling, said Jean-Pierre Steiner, CEO of Nestl Capital Advisers. Its extensive experience and expertise in launching and administering tax-transparent funds was helpful and comforting to us.
Nestl Capital Advisers is not new to the concept of pooled vehicles we have had a pooled fund in the form of an Irish unit trust since June 2001 through our Dublin domiciled Robusta fund range. However, we were attracted to efficiencies that can be gained through a tax-transparent vehicle such as the Dublin-domiciled CCF, Steiner said.
This latest launch brings to 18 the number of tax-transparent and non tax-transparent umbrella and single strategy funds supported by Northern Trust for multinational and investment manager clients. Included in the range of tax-transparent funds administered by Northern Trust are Irish CCF, Luxembourg Fonds Commun de Placement (FCP), and Dutch Fonds voor Gemene Rekening (FGR) fund types.
Studies we have carried out at Northern Trust have shown that using a non tax-transparent fund could impose a 30 percent withholding tax on U.S. equities held in such a fund, resulting in a drag of approximately 90 basis points in fund performance. Thats a significant amount, said Aaron Overy, head of pooling business development at Northern Trust, Europe, Middle East and Africa. Holdings in U.S. equities tend to account for the greatest proportion of holdings in global equity funds because the U.S. is such a large and important market. By pooling assets in a tax-transparent fund, such as a CCF, institutional investors and investment managers alike can achieve multiple benefits, including improved fund performance, in a tax-neutral way.