GLOBAL CUSTODY
BUYERS GUIDE
Global Finance presents its annual sponsored guide to the leading providers in the global custody market.
Custody assets:
2006: $13 trillion
2005: $10.9 trillion
Ratings:
(long-term deposits) Moodys Aa2, S&P; AA-, Fitch AA
Client profile:
By location: Americas 68%, Europe (including UK) 26%, Asia/Australia 4%, Middle East/Africa 2%. By investor type: mutual funds/fund managers/UIT-ETF 23%, broker-dealers 18%, banks/trust companies/central banks 12%, government issuers 12%, corporate and pension funds/endowment/foundation/Taft-Hartley 11%, insurance companies 10%, correspondent clearing 7%, other 7%.
Capabilities/services:
We offer clients comprehensive service solutions encompassing all facets of securities servicing, to include worldwide custody, investment/fund accounting, fund administration, securities lending, performance and risk analytics, investment compliance monitoring, portfolio transition management, commission recapture, hedge fund administration, alternative asset reporting, benefit disbursements, clearance and financial adviser services, collateral management, mid- and back-office outsourcing, transfer agency, exchange-traded funds and depositary receipt services. Clients leverage our foreign exchange, electronic funds transfer, global trade, asset management, global liquidity and currency overlay capabilities when investing in the global markets.
Top emerging markets:
Last year we expanded our coverage to 103 markets with the addition of Serbia and Panama.
Business developments:
In 2006 we introduced BNY ExecutionPlus, a new product that fully integrates our custody, execution, clearing and settlement services for financial institutions based outside the United States making trades in the US equity markets. Expanded risk and performance analytics for global equity and fixed-income assets as part of the banks strategic alliance with Wilshire Associates. Launched a new website offering enhanced FX research and analysis capabilities, including detailed data on cross-border investment trends, daily FX commentary, in-depth examination of economic news and central bank decisions, as well as coverage of daily worldwide events that affect currency, equity and fixed-income markets. Introduced a derivatives margin management service that facilitates for clients the administrative, processing, reinvestment and valuation activities associated with posting and receiving collateral in connection with over-the-counter derivatives trades.
Outlook:
We aim to provide a comprehensive array of essential services that enable institutions and individuals to move and manage their financial assets, successfully navigating the complexities of the worlds financial markets.
Contact:
Patrick Curtin
Tel: +1 212 635 6460
Fax: +1 212 635 7334
pcurtin@bankofny.com
www.bankofny.com
BHF-BANK
Custody assets:
2006: E280.9 billion
2005: E201.1 billion
Rating:
Fitch A
Client profile:
By location: Europe 61%, North America 39%. By investor type: institutional clients 59%, banks 29%, private clients 3%, various 9%. Foreign 44%, domestic 56%.
Capabilities/services:
BHF-BANK is one of Germanys most prestigious private banks. Its roots date back to the year 1854. As an advisory, service and sales and trading bank, we offer our demanding clientele a comprehensive array of customized solutions. BHF-BANK combines the strengths of a private bank with a long track record of capital market competence. Trust, an individual approach and impartialitythese qualities are at the very heart of the long-term guidance and advice we provide. The banks longstanding experience in the German securities services market goes hand in hand with a corporate culture that values prompt acknowledgements and short decision-making channels. BHF-BANK offers tailor-made custody services to meet its clients particular requirements. Its reporting services include a comprehensive SWIFT reporting matrix as well as our online tool cds@web.
Business developments:
Through its self-developed and maintained and thus very flexible IT systems, BHF-BANK is anticipating the requirements of its clients. Beside our ISO 15022 compliant SWIFT messaging system, we launched our comprehensive Internet tool cds@web in May 2005. Currently we offer 18 different types of reports covering all aspects of securities custody and administration via this online tool. OTC, corporate actions as well as proxy voting instruction-entry functionalities will be added during 2007. Through our selective system enhancements, we are confident to seize the advantages out of MiFID beginning in November 2007.
Outlook:
BHF-BANK is very committed to its custody services. Client satisfaction is key, and thus we are concentrating our efforts on improving it. By concentrating on customer requirements, we estimate we will exceed E300 billion assets under custody by the end of 2007. Regarding our sub-custody services, we are also carefully evaluating the entrance into markets other than Germany.
Contact:
Cornelia Keth/Moritz Ostwald
Tel: +49 69 718 3738/+49 69 718 6838
Fax: +49 69 718 6050
cornelia.keth@bhf-bank.com
moritz.ostwald@bhf-bank.com
www.bhf-bank.com
JPMorgan
Custody assets:
2006: $13.9 trillion
2005: $11.2 trillion
Ratings:
S&P; AA-, Moodys Aa2
Client profile:
By location: North America, Europe/ Middle East/Africa, Asia-Pacific, Central and South America. By investor type: asset managers, corporate and public/government (pension and treasury), insurers, banks (commercial and central), broker-dealers and others.
Capabilities/services:
JPMorgan Worldwide Securities Services (WSS) has the global reach and industry leadership to handle any investment type anywhere in the world. Our franchise includes a global custody network that covers 90 markets in more than 100 global locations, and we hold $13.9 trillion of assets under custodya 30% growth year on year. JPMorgan helps investors optimize efficiency, enhance revenues and mitigate risks with a complete set of solutions, including custody and accounting, performance measurement and analytics, securities lending, transition management, short-term investments, benefit payments, fund administration and compliance, and back-office outsourcing.
Top emerging markets:
JPMorgan is focusing on Vietnam and Kazakhstan. Additionally, we see significant increase in asset gathering in UAE, Mauritius, Zambia, Nigeria, Pakistan and Oman. JPMorgan continues to focus on China A shares and Thailand, and, beyond our existing network, we are researching Bosnia, Costa Rica, Tanzania and Uganda for possible additions in 2007.
Business developments:
We continue to invest in our product platforms, people and technology. In 2006 we invested $600 million in state-of-the-art client facing technology, automated platforms and analytical tools. We acquired Paloma Partners middle- and back-office hedge fund operations platform/capability, and most recently we announced the acquisition of Integrated Investment Services (IIS), a fund accounting, fund administration and transfer agency services business.
Outlook:
Our commitment to innovation continues with the development of our Alternative Investment Services division, a comprehensive offering for our investment management, pension fund, charities, broker-dealer and corporate clients. JPMorgan has always made, and will continue to make, the necessary and significant investments required to ensure we lead the industry. We aim to continue to provide the best service levels and the best solutions possible to support our clients increasingly complex business needs in todays competitive markets.
Contact:
Conrad Kozak
Tel: +1 212 552 5500
conrad.kozak@jpmorgan.com
www.jpmorgan.com/WSS
Mellon Group
Custody assets:
2006: $4.57 trillion
2005: $3.97 trillion
Ratings:
Mellon Financial Corporation: Moodys A1, S&P; AA-, Fitch AA-
Client profile:
By location: US $2,816 billion, Europe/Asia/other $1,003 billion, Canada $748 billion.
Capabilities/services:
Mellon is the preeminent provider of customized asset servicing solutions for public and private pension funds, asset managers, mutual funds, insurance companies and other financial institutions. Our goal is simple: We enhance our clients ability to process, monitor and measure investment data from around the world. Mellons dedication to supporting the entire investment process is reflected in the breadth and depth of our product offerings and our commitment to ensuring client satisfaction every day. Mellon offers a multitude of trust, custody and related services, which can be offered as a bundled or unbundled service package, depending upon clients needs. Our core services include trust and safekeeping, portfolio accounting, global custody, back-office outsourcing, cash management and security movement, participant services, securities lending, foreign exchange, hedge fund administration, performance measurement and analytics, online information delivery and support services for internal investment management.
Top emerging markets:
The following countries are currently under research for appointing a sub-custodian: United Arab Emirates, Malta, Cyprus, Serbia, Ecuador.
Business developments:
On December 4, 2006, Mellon Financial Corporation (NYSE: MEL) and The Bank of New York Corporation (NYSE: BK) announced that they had entered into a definitive agreement to merge their organizations. The new company, which will be called The Bank of New York Mellon Corporation, will be the worlds leading asset servicer, with $16.6 trillion in assets under custody, a corporate trustee with $8 trillion in assets under trusteeship, and will rank among the top-10 global asset managers, with more than $1.1 trillion assets under management. Under the terms of the merger agreement, neither MEL nor BK will be the surviving company, and the MEL shareholders and the BK shareholders will be exchanging their shares of MEL and BK for shares of the new company. The merger transaction has been unanimously approved by each companys board of directors and is expected to be completed early in the third quarter of 2007, subject to shareholder and regulatory approval.
Outlook:
In 2006 Mellon expanded our global footprint, with ABN AMRO Mellon opening a branch in Luxembourg and also establishing a representative office in Beijing. Mellon continues to invest in core services, as well as developing enhanced products while growing our assets under custody, administration and related services by leveraging our strengths and capabilities as the premier global asset servicing provider.
Contact:
Mellon Global Securities Services:
Jon Dunham
Tel: +1 412 236 3051
Fax: +1 412 236 3119
dunham.j@mellon.com
www.mellon.com/assetservicing
CIBC Mellon:
Barbara Barrow
Tel: +1 416 643 6361
Fax: +1 416 643 6409
barbara_barrow@cibcmellon.com
www.cibcmellon.com
ABN AMRO Mellon:
Tim Steele
Tel: +44 20 7163 5850
Fax: +44 20 7163 5374
tim.steele@abnamromellon.com
www.abnamromellon.com
Nedbank
Custody assets:
2006: R1 trillion
2005: R850 billion
Ratings:
Nedbank Group: Moodys Baa1, Fitch BBB
Client profile:
By location: In a South African context, the majority of clients are located in Cape Town or Johannesburg, with scattered clients in Durban, East London and Port Elizabeth. The majority of major asset managers are found in Cape Town. Within sub-Sahara Africa, clients that Nedbank services are predominantly located in Namibia, with touch points in Mauritius. By investor type: Indirectly we service private banking clients through our custody business area, while Nedbank Investor Services (NIS) focuses on the following client segments: retirement fund industry, public investment corporation, unit trust (mutual funds), multi managers, asset managers, issuers of corporate bond and money market instruments, other custodians, brokers, treasury departments, assurance companies, black empowerment employee trust scheme, international client base, which is made of global custodians and foreign broker-dealers. Foreign: approximately 15%. Domestic: brokers 30%, retirement funds 32%, asset managers 23%. Other: Nedbank provides master custody and pension fund administration to the retirement fund industry as well as compliance monitoring to unit trust companies. Administration under management is approximately R650 billion.
Capabilities/services:
Our service is based on clearing settlement and custody, corporate event management and proxy voting services, securities lending, pension fund administration, compliance monitoring, and exception and customized management reporting.
Top emerging markets:
Driven by client demand, main client interest resides in Namibia.
Business developments:
In conjunction with clients, design compliance-monitoring, performance and attribution analysis tools. As a stakeholder in STRATE, we are part of the alternative settlement model solution, which is also closely aligned to the money market and bond enhancement program.
Outlook:
Last year ended at a high for NIS due to the phenomenal growth in the South African financial markets. As a result of this, 2007 is seen as a challenging year for both NIS and our clients. For NIS the challenge will be to manage the revenue expectations created in 2006. Our clients share similar challenges, and NIS will be faced with providing a cost-effective product solution to cater to the expectations of clients.
Contact:
Louise Currie
Tel: +27 11 667 1113
Fax: +27 11 667 1077
LouiseCu@nedbank.co.za
www.nedbank.co.za
Alternative contact: Jean Williams
Tel: +27 11 667 1164
Fax: +27 11 667 1637
JeanWi@nedbank.co.za
www.nedbank.co.za
Northern Trust
Custody assets:
2006: $3.5 trillion
2005: $2.9 trillion
Ratings:
Moodys Aa3, S&P; AA-, Fitch AA-
Client profile:
By location: More than 40 countries. By investor type: international/fund services 27%, US corporate ERISA 39%, foundations/endowments 16%, US public funds/Taft-Hartley (union) 11%, insurance 3%.
Capabilities/services:
Northern Trust is a global leader in managing the sophisticated financial needs of corporations, governments and public entities, financial institutions, foundations, endowments, insurance companies and investment managers. We offer the full array of asset servicing products and services including safekeeping, trade processing and settlement, contractual settlement, income collections, tax reclamation, proxy voting, online/Internet reporting, cash management, foreign exchange, securities lending, investment risk and analytical services, cross-border pooling, commission recapture, transition management, fund administration, trade services and trade execution analysis.
Top emerging markets:
Taiwan, Vietnam, Kuwait, Saudi Arabia, India.
Business developments:
In 2006 Northern Trust successfully completed the migration of Insight Investments operations to Northern Trusts platform, providing every aspect of post-trade execution support. Completion of this migration has added more than 600 portfolios and approximately $190 billion in assets under management. Northern Trust also completed the integration of the Baring Financial Services Group (FSG) acquisition and significantly enhanced our fund administration and operations services during 2006. Our hedge fund administration business has grown significantly. We now service 54 managers and a total of 167 hedge funds worldwide. We have also experienced tremendous success with our innovative cross-border pooling product, which allows multinationals to pool assets of their worldwide pension plans and investment managers to combine the global assets of their investors into a single pooled vehicle. We now serve six pooling clients with approximately $35 billion in assets under custody.
Outlook:
We will continue to focus on our clients with innovative and solutions-oriented product capabilities to meet their complex investment and asset servicing needs. In 2006 we opened an office in Amsterdam, and we will continue to expand our global footprint so that our relationship management staff can service their clients as close to their home markets as possible.
Contact:
Americas: Jeffrey Conover (pictured)
Tel: +1 312 557 3012
jeff_conover@ntrs.com
Europe/Middle East/Africa:
Anne Lise Winge
Tel: +44 207 982 2205
anne-lise_winge@ntrs.com
Asia-Pacific: Lawrence Au
Tel: +65 6437 6601
Fax: +65 6437 6609
lawrence_au@ntrs.com
www.northerntrust.com
PFPC
Custody assets:
2006: $427.3 billion
2005: $476.3 billion
Ratings:
PNC Financial Services Group: Moodys A2, S&P; A, Fitch A
Client profile:
By location: Americas 95%, Europe/Asia 5%. By investor type: 40 Act mutual funds 74.8%, offshore funds 8.9%, institutional/trust 7.8%, alternative investments 5%, other 3.2%. Foreign $22 billion, domestic $405.3 billion.
Capabilities/services:
For more than 30 years, PFPC has been a leading provider of global custody services to a broad base of clients, including mutual funds, investment advisers, partnerships, institutions, insurance companies and trusts. With a complete set of custodial services and connections to major depositories, PFPC accommodates virtually any security processing requirement. From investment securities to income collection to corporate actions, we provide an array of global services in a straight-through processing environment. PFPC also offers a personalized, global securities lending program focused on enhancing revenues and maintaining a low risk profile, enabling clients to give their customers the opportunity to generate incremental income on portfolio securities that would otherwise remain idle.
Top emerging markets:
Russia and India are our clients top emerging markets, gauged by level of client activity and assets.
Business developments:
PFPC continues expansion of international operating capabilities and global platform to support our clients global servicing needs.
Outlook:
PFPCs corporate mission is to be the premier provider of technology and processing solutions for the global investment industry. To maintain a leadership role in the industry, our strategic direction calls for strong transformational growth in emerging products and markets, continued nurturing of our core services and continuous improvement of operating efficiencies.
Contact:
Bill Salus
Tel: +1 302 791 2000
information@pfpc.com
www.pfpc.com
Santander
Custody assets:
2006: Over E500 billion
Ratings:
Moodys Aa3, S&P; AA-, Fitch AA-
Client profile:
Foreign custody clients (Santander Investment): 60 banks, 34 global custodians, 21 broker-dealers. Domestic custody clients (Santander Investment): 3 banks, 15 pension funds, 7 insurance companies, 36 fund managers, 14 brokers.
Capabilities/services:
Santander is Spains leading financial institution and the largest bank in the eurozone by market capitalization. Our commitment and contribution to the securities industry is well established after more than a century of providing services in this field. A full array of services is on offer that contemplates every nature of client business, way beyond plain-vanilla custody and settlement. Services on offer cover all the necessities of all client types, such as global custodians, broker-dealers, investment banks, hedge funds, asset managers, pension funds, issuing corporations, etc.
Top emerging markets:
Santander offers a comprehensive array of innovative services in a broad range of markets, currently having full local capabilities in Iberian and Latin American markets along with a franchised presence in 35 others.
Outlook:
Santander is fully committed to expanding the range of services that are on offer and the geographical globalization of our business. We will be looking to broaden our horizons and increase our presence in a number of countries, using our recently acquired local presence in the UK and US as a base.
Contact:
Tel: +34 1 289 39 32 / 28
globalsecurities@gruposantander.com
www.gruposantander.com
Union Bank of California
Custody assets:
2006: $230 billion
2005: $208.9 billion
Ratings:
Moodys A1, S&P; A+1, Fitch AA-
Client profile:
By location: Americas 76%, Asia-Pacific 19%, Europe/Middle East/Africa 3%. By investor type: banks 53%, investment managers 25%, mutual funds 21%, other 1%. Foreign 3%, domestic 97%.
Capabilities/services:
Include fully integrated securities processing and controls for foreign markets, with a single point of contact for processing and inquiry needs; flexible information delivery, including direct access and electronic delivery from real-time integrated processing and accounting system, supporting US and global processing on a single platform.
Top emerging markets:
Brazil, Korea, Poland, Taiwan, Thailand.
Business developments:
We continue to reinvest resources in our comprehensive, web-based account information delivery utility, Online Trust & Custody. Recent enhancements include the integration of sophisticated performance analytics, investment policy monitoring, interval accounting and Sarbanes-Oxley compliance. In 2007 we will implement an integrated online corporate action management and execution capability.
Outlook:
Union Bank remains committed to the provision of custom, client-focused, institutional securities services. Continued consolidation in the industry serves to highlight our unique position as a pioneer in fully integrated global master custody and securities lending, with a stable history and a strategic commitment to the specific needs of our customers.
Contact:
Kevin Galvin
Tel: +1 415 705 5021
Fax: +1 415 705 5022
kevin.galvin@uboc.com
www.uboc.com
Wells Fargo & Company
Custody assets:
2006: $1,026 billion
2005: $791 billion
Ratings:
Moodys Aaa, S&P; AAA, Fitch AA
Client profile:
The majority of our clients are US-based. We also have clients domiciled in Ireland and the UK. Our global custody clients are currently invested in 42 countries, with plans for entering eight more.
Capabilities/services:
Fund managers, pension funds, corporations, insurance companies, foundations and endowments, public/government agencies, Taft-Hartley, partnerships and foreign entities.
Top emerging markets:
Brazil, South Korea, Thailand, Malaysia, Taiwan, China, India, Mexico, Poland, Russia, Turkey, South Africa, Indonesia, Greece.
Business developments:
Wells Fargo recently introduced a robust new investment guideline monitoring solution, available via our Commercial Electronic Office Internet portal. The program offers real-time reporting of alerts and warnings in addition to a comprehensive suite of reports, daily manager alerts summary, position level reporting and customized reporting capabilities. In addition, Wells Fargo clients now have access to real-time cash and transaction data online.
Outlook:
Recent consolidation in the custodian bank market has created opportunities for Wells Fargo. As competitors become larger, we can offer high-touch solutions for middle-market and larger clients, who may be considered to be in a lower service tier in a larger organization. As Americas only bank to have the highest credit ratings possible from both Moodys and Standard & Poors, Wells Fargo is one of the largest, strongest and most highly recognized financial services companies in the nation. Investment-related businesses are a key focus for Wells Fargo. In fact, growing investments, trust, brokerage, private banking and insurance is Wells Fargos top strategic initiative. Wells Fargo is a client-driven organization. The Wells Fargo Strategic Relationship Management program is a disciplined, proactive and consultative approach to serving our clients. Our goal is to give our clients increased access to Wells Fargos resources. Clients have access to a range of expertise, from investment and product technical specialists to benefits consultants; our team becomes the clients most trusted adviser.
Contact:
Sean Thomas
Tel: +1 415 396 3695
Fax: +1 415 981 9106
thomas@wellsfargo.com
www.wellsfargo.com/custody
