Telstra Super, Club Plus, and WA Super respective appointments of JP Morgan over the past year has helped it become the largest overall provider of custody services with $627.60 billion in assets under custody (AUC).
It is the first time in the 22-years of the Australian Custodial Services Association (ACSA) history (the company set up to represent the interests of the custodial and asset administration industry in Australia) that NAB Asset Servicing has not held the top spot. It came in second with $564 billion in AUC.
The super funds cited JP Morgan’s technology, ability to meet demands from increased in-house investment management activities, and ability to be flexible and tailor their services to meet requirements as reasons for choosing it.
“JP Morgan has a world-wide reputation and not only demonstrated a keen understanding of our business but were able to provide the extensive service capabilities we required,” Paul Curtin, Telstra Super’s chief financial officer, said in a statement at the time of the appointment.
Nadia Schiavon, head of custody and fund services at JP Morgan, Australia and New Zealand, said this achievement underscores the importance of an international offering in a dynamic and rapidly growing market.
“JP Morgan is committed at a global level to our custody and fund services business and importantly, Australia plays a significant role in JP Morgan’s roadmap for this business. It is of strategic importance to the firm and our leaders, Jamie Dimon and Daniel Pinto, have stated their commitment to the bank’s custody business.”
ACSA statistics reveal that while the custody sector is witnessing overall positive growth, the drivers have changed, with custody of on-shore assets outpacing that for off-shore.
In particular, it found –
- In the six months to June 30, 2016, total AUC for Australian investors grew to $2.95 trillion; representing circa 183 per cent of the capitalised value of All Ordinaries and indicating the growing need for alternative asset allocation and foreign markets
- Of this amount, $2.05 trillion represents Australian assets; a 3.1 per cent increase from last period
- The remaining $903 billion in foreign assets represented a decrease of 2.4 per cent; despite the fall, off-shore investment still constitutes 30.6 per cent of the total AUC for Australian investors
- The level of Australian AUC for foreign clients (sub-custody) grew by 3.4 per cent to $1.2 trillion.
ACSA chair, David Knights said, “The positive, yet lower growth in total assets under custody for Australian investors compared with [the] last six months of 2015, may be attributed to lower market yields. The S&P/ASX 200 index in this period was down 0.7 per cent, reflecting the lower overall domestic market growth.”
“The custodial industry remains focused on enabling our clients’ access to global markets and alternative asset classes,” he added.
For a full copy of the statistics, visit: http://acsa.com.au/?page=AUSCustody