The AU$24bn Commonwealth Superannuation Corporation (CSC) has chosen Northern Trust to provide full master custody and related services.
“This appointment follows a detailed search and extensive due diligence on several major providers of custodian services in Australia, said CSC’s CEO Peter Carrigy-Ryan. “CSC regards its relationship with its custodian as a strategic business relationship. The effective delivery of custodial services is critical for the investment and management of the superannuation funds for which CSC is responsible.”
The transition is expected to commence in early 2012.
CSC was established on 1 July 2011 following the merger of the ARIA (Australian Reward Investment Alliance) and MilitarySuper boards, and the Defence Force Retirement and Death Benefits Authority. J.P. Morgan had previously served as custodian of ARIA while NAB Asset Services previously served as the custodian of MilitarySuper.
CSC is Northern Trusts third client in Australia. Northern Trust is the custodian for the AU$75.1bn Future Fund and in March signed an agreement with the AU$60.2bn institutional fund manager QIC to provide outsourced middle-office services.
Paul Cutts, Managing Director of Northern Trust Australia said, “CSC will be Northern Trusts first full service master custody client in the Australian superannuation industry and both organisations are looking forward to the opportunities that this partnership will bring. We are delighted that CSC has recognised the significant value in our model and the range of market leading capabilities we can deliver to the fund.”
CSC manages and invests funds for more than 680,000 contributing, preserved and retired members of the Commonwealth governments superannuation funds. Four of the schemes for which CSC is responsible are APRA regulated, and the others are exempt public sector schemes.
“CSC’s review and selection process has been thorough and highly detailed and the interaction between the teams throughout has been extremely positive,” noted Jeremy Hester Head of Sales for Northern Trust in Australia. “We expect to establish a long and mutually rewarding relationship with CSC.”