Northern Trust secures £6.7 billion custody mandate

Northern Trust has been selected to provide custody services for the Northern Ireland Local Government Officers’ Superannuation Committee’s (NILGOSC) £6.7 billion pension fund assets.

As part of the mandate, Northern Trust will provide global custody, accounting, securities lending, performance measurement and foreign exchange services.

The mandate is the 13th of its kind for Northern Trust under the UK’s Local Government Pension Schemes (LGPS) national framework agreement.

The most recent of these came in March when the Scottish Borders Council selected the custodian to provide global custody services for its £550 million pension fund assets.

“As a leading expert across the LGPS, Northern Trust has a strategic focus on the LGPS market and a proven commitment to this segment,” said David Murphy, chief executive of NILGOSC.

“Combined with its ability to provide high-quality tailored solutions that meet our specific requirements, this was a key factor in their appointment.”

The LGPS mandates follow research by Northern Trust earlier this year indicating pension funds are facing a major cash dilemma in light of liquidity challenges and variation margin rules for uncleared derivatives.

Some pension funds have previously stated that increasing cash holding requirements could force them to re-evaluate their hedging strategies.

“We are delighted to have been appointed by NILGOSC,” said James Wright, head of the institutional group for the UK and Ireland at Northern Trust.

“At Northern Trust, we understand that the pensions landscape is continually evolving and are committed to creating tailored solutions for our clients to meet their changing needs.”