(May-2005): Super Assets - Asset Super in new custodial arrangement

National Custodian Services (NCS) has emerged as a major beneficiary of a decision by Asset Super to restructure its custodian and funds management arrangements.

Asset Super announced in late April that it had undertaken a strategic rearrangement of its custodian holdings with NCS and implemented a new currency overlay mandate with State Street Global Advisers (SSgA).

As well, the big fund said that it had outsourced its unit pricing arrangements to NCS.

Commenting on the move, Asset Super general manager, John Paul said it represented a simplification of the funds investment by restructuring the way in which its assets were held with NCS.

He said the move had evolved out of Asset Super’s successful application for an Australian Prudential Regulation Authority licence, something which had caused it to review its risk management procedures.

Paul said this had led to a rationalisation of its holdings with the custodian and a switch from in-house unit pricing using an administrator to unit pricing using NCS.

“Both of these actions were strategic moves, as part of our on-going mission to mitigate risk for the fund,” he said.

Paul said the change to the investment structure holdings with NCS had also involved Asset dropping its passive investment of $23 million with Vanguard, which was in an international indexed, hedged product and adopting an active management approach.

He said the proceeds from this redemption had been put into two existing international equity manager products, with 60 per cent of the proceeds going to the SSgA indexed enhanced unhedged trust and 40 per cent to NCIT Capital’s capital international global share trust.

Paul said the fund had also implemented a new direct mandate, with SSgA to apply a currency overlay to the investments with the two international managers to maintain a level of hedging.