Although the two deals now count as a single multi-country brief, Daron Pearce, managing director at BNY, insisted the second contract was won fair and square. The bank had to compete with other providers and prove itself anew in a separate selection process.
BNY’s success is likely to disappoint State Street, which runs an outsourcing mandate for another Allianz subsidiary, Pimco.
Mr Pearce emphasised that the UK mandate was not a lift-out deal, where the provider simply takes over the client’s legacy systems. Instead, RCM UK would be transferred to BNY’s proprietary technology. Several funds have already been transferred, with all funds scheduled for transfer by year-end and middle office systems to be migrated in 2005.
The technology in question is SmartSource, BNY’s outsourcing business model, which is run by Mr Pearce. SmartSource would need no tweaking in order to accommodate the new client, said Mr Pearce, although he admitted, “in the fund space, particularly endowment vehicles, we are doing some things for the first time”.
But he indicated that implementing the deal would be far from overwhelming for the bank, which he said was ready to take on further outsourcing clients.
But BNY will have to win any new business without the aid of one of its most charismatic characters. Senior executive vice-president Tom Perna, the straight-talking New Yorker, is to leave the firm. Details of where he may resurface have not been disclosed.
During his two decades at the bank he was architect of many of its most important acquisitions, such as RBS Trust Bank and Pershing. Mr Perna’s current responsibilities, which include executive management for several of the Company’s securities servicing businesses, will be assumed by other members of the company’s executive team.
On the custody side of BNY’s business, a new brief worth e1.5bn has been secured from Hannover Re, a top five global insurance firm. BNY will run the custody mandate jointly with its partner for the Teutonic and Benelux region, ING.
BNY’s assets under custody rose by $400bn in the past six months to $8700bn, according to the latest FT Mandate research. The volume of assets makes it the second largest custodian in the world.
RM
See The Chief, pages 14-15 and Bank of New York interview, page 77
