BlackRock shifts assets to JP Morgan in major custody deal

Asset manager moves $1 trillion in assets from State Street to JP Morgan to provide custody and fund services.
By Paul Walsh

BlackRock has selected JP Morgan to provide custody and fund services for over $1 trillion of its clients’ assets in a landmark deal, moving the assets away from State Street.

The transaction is among the largest custody deals ever signed and it is believed that JP Morgan will onboard the assets over the next two years.

State Street confirmed in an earnings presentation that BlackRock would move a portion of their assets, largely common trust funds, to another provider.

State Street is still providing custody services to BlackRock, however the custodian couldn’t confirm the exact amount. 

“This historic deal expands our relationship with BlackRock and is a validation of the investments we’ve made and the resources we’ve added to the custody and fund services business,” said Daniel Pinto, CEO of JP Morgan’s Corporate & Investment Bank.

“As the only global custodian with a top markets franchise, we believe that scale, technology and seamless execution are essential to best-in-class client service.”

The deal will see a shift of $1 trillion in assets under custody from previous custodian State Street.

Despite the shift by the world’s largest asset manager – by assets under management – State Street still boasts high profile clients including the likes of Pimco and Allianz Global Investors.

“Today’s action is yet another example of BlackRock’s commitment to maximise the benefits of scale as a means to create value for our clients and our shareholders,” said Derek Stein, senior managing director and head of business operations and technology at BlackRock.  

“Many of BlackRock’s clients will experience cost savings through decreased operating expenses at the fund level. 

“As a fiduciary for our clients, we continually look for ways to secure services at the lowest cost and highest quality available. The expansion of our custodial relationship with JP Morgan reflects its attractive value proposition for these services while still allowing BlackRock to maintain a diverse roster of fund service providers,” said Stein.