GSAM appoints BNY Mellon as European ETF asset servicing provider

BNY Mellon will provide custody and fund accounting services for Goldman Sachs Asset Management's first European ETF. 

By Joe Parsons

Goldman Sachs Asset Management (GSAM) has appointed BNY Mellon for a range of asset services for its newly-launched range of European exchange traded funds (ETFs).

BNY Mellon will provide custody, fund accounting, transfer agency, paying agent and common depository services, on top of supporting GSAM’s ETF order management processes.

GSAM launched its first ETF fund into the European market – the Goldman Sachs ActiveBeta US large cap equity UCITS ETF – this week, making it the first in a range of funds under the Goldman Sachs ETF ICAV structure. According to the GSAM’s most recent figures, the fund holds over $6.8 billion in assets under management.

The suite of products we plan to launch in the coming months will enable our clients to build diversified global portfolios using a mix of active and passive investment styles. We are pleased to be working with BNY Mellon for ETF servicing on this product range,” said Peter Thompson, Head of GSAM’s European ETF Business.

It has also selected the international central securities depository (ICSD) model for its new Irish UCITS ETF.  As a common depository with ICSD capabilities, BNY Mellon services nearly $3 trillion of assets in the ICSD model, and has been working with ETF managers in the UK and Ireland to move to this structure, following regulatory and infrastructure developments driven by Brexit.

The mandate win is a significant one for BNY Mellon as it looks to drive its ETF asset servicing business globally. 

Our appointment bears testament to the quality of our ETF-specific technology, our scale and our team of ETFs experts. It also underscores our commitment to growing our ETF business in markets around the world,” added Robert Rushe, head of ETF services for EMEA, BNY Mellon.

Two years ago, BNY Mellon’s chief executive, Charles Scharf, highlighted the ETF market as an area where the custodian could improve its asset servicing business, and added how the global custodian had lagged behind its competitors in attracting ETF business from asset managers.

It has since improved its ETF business significantly, as Scharf explained to analysts on BNY Mellon’s second quarter earnings call last month that assets under custody (AuC) for ETFs increased by 50% over the year.

Most recently, it launched a round-the-clock global distribution service for Irish-domiciled ETFs, allowing greater distribution into the Asia-Pacific and Latin America regions.