GSIS Hires JP Morgan As GIP Custodian

The Government Service Insurance System (GSIS) of the Philippines is hiring JP Morgan to replace Citi as custodian for its overseas investment programme.
By None

The Government Service Insurance System (GSIS) of the Philippines is hiring JP Morgan to replace Citi as custodian for its overseas investment programme. The GSIS board of directors approved the change in custodian last Friday (27 February).

Citi will be turning over custody of an estimated US$600 million in overseas assets, managed by ING Investment Management and Credit Agricole Asset Management (Singapore) Ltd., to JP Morgan following a transition period.

The replacement of Citi as custodian comes in the wake of the global financial crisis that has battered Citigroup. The US government last week took a 36% stake in Citigroup, the third attempt to prop up the ailing financial giant following a US$45 billion bailout in a partial nationalisation move.

GSIS began reviewing Citi’s situation and studying the possibility of hiring a new custodian in December 2008, according to a senior GSIS official. Soon after Citi was given notice by GSIS management that its services as custodian to the overseas investment program, known as the Global Investment Program (GIP), will be terminated.

As global custodian, JP Morgan assumes the same responsibilities for global investments, including income collection, transactions settlement, fund valuation and accounting, compliance monitoring, transition management, and securities lending related to the GIP. GIP is the first absolute return mandate for overseas investment to be awarded by a government pension from Southeast Asia.

L.D.

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