Custodians looking at exit strategies

Custodians are reportedly assessing their position in certain markets.
By Paul Walsh

Custodian banks are revaluating their strategies in certain markets according to the head of global sub-custodian relationship management at Brown Brothers Harriman.

Speaking during the NeMa event in Dubrovnik, Mike Drake spoke of a developing trend for custodians in markets considered unsubstantiated.

“Within the network world today, custodian banks overall, not just Brown Brothers Harriman, are looking at various exit strategies in markets that might be a bit more tenuous.”

“We are seeing some talk and have seen some exits from a custodian bank perspective around evolving markets like Trinidad and Venezuela, so identifying what those are and determining what those are is how things have evolved in the last year,” said Drake.

At NeMa this year, Andrew Osborne, senior VP, head of worldwide network management at Northern Trust, voiced his concerns over sub-custodians pulling out of various markets, claiming they were looking into ‘alternative models’.

Drake suggested that other markets were seeing interest from clients.

“On the other side of the coin, we are being driven by clients in their investment interests in other markets so we need to look at other networks that are considered frontier such as Laos and Mozambique,” he added.

“These markets are driven by our clients’ interest in these markets which is in itself substantiated by their own investment strategies.”