State Street awarded global custody and middle-office mandate by Korea’s NPS

NPS will also outsource, for the first time, its middle-office processes for all of its overseas investments to State Street.

By Joe Parsons

The National Pension Service of Korea (NPS), one of the world’s largest pension funds, has outsourced its middle-office for the first time to State Street.

The mandate also includes the re-appointment of the Boston-based bank as its global custodian and fund administrator for its global equity portfolio.  State Street will continue to provide these services for a further three years.

NPS will also outsource, for the first time, its investment book of record (IBOR), transaction management and trade processing for all of its overseas investments to State Street.

“NPS has been expanding into new asset classes and geographies in the past few years, to tap into new sources of alpha and continue to deliver for its members,” said Ian Martin, head of global services and global exchange, Asia-Pacific, State Street.

“However, this has naturally added complexity to the fund’s custody and administration needs. Our two organisations have forged a strong, effective partnership during the last five years, which has adapted over time to address these evolving needs.”

According to State Street’s latest research, it revealed asset owners will increasingly prioritise upgrading their back and middle-office technology over the next five years to eliminate operational inefficiencies and achieve growth.

“This significant decision to combine middle-office and back-office operations will improve straight-through processing and data integration, which will reduce risk and increase speed. We look forward to partnering with NPS to streamline operations to improve efficiency,” added Martin.

Earlier this week, NPS also revealed it had appointed BNY Mellon as the global custodian for its fixed income portfolio.