Six Custodians Tender for Over £5 Billion of U.K. Pension Fund Assets

Three local authority pension funds in the U.K. have jointly started a procurement process for custody services.
By Janet Du Chenne(59204)
Three local authority pension funds in the U.K. have jointly started a procurement process for custody services.

The process is part of a local government pension scheme framework for custody services in the U.K. Under the framework, six custodians—BNP Paribas Securities Services, BNY Mellon, HSBC Securities Services, J.P. Morgan, Northern Trust and State Street—were awarded to provide the contracts at the end of 2013.

As part of the calling off process and the procurement timetable, Hackney, Norfolk and Southwark have started the dialogue process with the six custodians and are expecting to appoint one custodian by the end of March. The technical evaluations and due diligence work were completed as part of the framework.

The three pension funds will make a joint decision for a single custodian with a separate contract for each of the funds. The combined value of the assets is over £5 billion.

Services sought in the procurement process include core custody, securities lending, foreign exchange, cash management funds and reporting and analytical services.

The two other funds in the framework—Cambridgeshire and Northamptonshire—are about to start their joint process of procurement for a single custodian.

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