Northern Trust secures £550 million custody mandate

Northern Trust has been appointed by Scottish Borders Council to provide global custody services for its £550 million pension fund assets.

As part of the arrangement the custodian will also provide accounting, performance measurement, cash management and foreign exchange services.

The move is the twelfth appointment for Northern Trust under the Local Government Pension Scheme (LGPS) national framework agreement.

Northern Trust’s institutional investor group currently supports a number of pension schemes in the LGPS ranging from £450 million to £16 billion in assets.

“Northern Trust demonstrated its ability to provide solutions tailored to our specific needs, for example meeting our future accounting requirements,” said councillor Bill White, chair of the pension fund committee at Scottish Borders Council.

The latest appointment follows research by Northern Trust earlier this year indicating that pension funds are facing a major cash dilemma in light of liquidity challenges and variation margin rules for uncleared derivatives.

Some pension funds have previously stated that increasing cash holding requirements could force them to re-evaluate their hedging strategies.

“At Northern Trust, we are absolutely focused on supporting local government pension schemes,” said Penelope Biggs, head of the institutional group at Northern Trust.

“We worked closely with Scottish Borders Council to ensure we delivered a customised solution that meets their evolving needs and helps drive operational and financial efficiencies for the fund.”