JP Morgan’s securities services business has been selected by The California State Treasurer’s Office (STO) to provide custody services for $200 billion of the State’s investment portfolio and pledged assets from insurers.
The transition of assets – which moved from Citi to JP Morgan – was completed on 18 July, marking an expansion of JP Morgan’s footprint in the public treasury space and in California as a custody provider.
The STO’s decision to appoint JP Morgan reflects a long-standing partnership between the two organisations, with the custodian serving as the STO’s depository bank since 2010. JP Morgan also provides treasury services to facilitate the State’s daily operations, and has regularly engaged with the treasurer’s office on securities transactions for their self-directed portfolios for portfolios for over 35 years.
Scott Markowitz, Americas head of custody for JP Morgan securities services, said: “JP Morgan’s securities services business is fully committed to delivering strategic solutions to asset owners. We are proud to have earned this mandate to safeguard the assets of California’s State Treasurer Office and further deepen our longstanding firmwide partnership with the state.”
The new deal will add synergies to the partnership, with the STO leveraging JP Morgan’s expertise in servicing asset owners with dedicated operational support, customised cash and trade management solutions, and real-time oversight and reporting capabilities.
Victoria Tadross, head of US asset owners sales at JP Morgan securities services, said: “We are excited about our new securities services partnership with STO. We believe this mandate underscores the success of our hands-on service model, flexible platform and tailored solutions for internally-managed asset owners, enabling optimisation of their operating model. Our expertise supporting insurers will also enable STO to provide automated, real-time reporting for statutory deposits pledged to the state.”
The mandate comes amid a strong run of new business for JP Morgan in the US asset owner segment. Over the past six months, the firm has secured asset servicing mandates of more than $500 billion in assets under management for institutional clients in the sector.
More broadly, the custodian recently posted record quarterly earnings, with securities services revenue up 12% to $1.4 billion and assets under custody also rising to a new peak of $38 trillion.