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Three funds join hands in search for custodian
Three Queensland-based superannuation funds have recently combined their funds under management to invite tenders for custodian services as a "package deal", ultimately appointing State Street.
QIEC Super, Club Super and Mercy Super have a combined $1.9 billion under management, which gives them more bargaining power than going to market individually, according to their spokesperson.
"The key was for all three funds to agree early on what we were looking for in a custodian. After that was settled, the process was quite smooth. We also had the expertise of JANA who facilitated the tendering process."
According to State Street head of global services for South Asia and Pacific, Ian Martin, the company will provide accounting, crediting rates and unit pricing, taxation services and will assist in providing data required by the Australian Prudential Regulation Authority under the Stronger Super reforms.
"Super funds are coming under increasing pressure to merge, driven by the regulatory changes and the need to minimise costs," Martin said.
"But there are many barriers to a successful merger, as a recent study of ours revealed. These three funds have developed an innovative solution — harnessing the benefits of scale while avoiding the issues commonly associated with a full-blown merger."
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