The asset manager has yanked custody service from State Street on $1tn of assets in a move to cut costs by putting pressure on vendors. The deal is one of the largest shifts of custody assets ever and comes as JP Morgan has invested heavily in the technology and automation of its custody service.
JPMorgan expects to take over administration of the assets during the next two years. Custody banks keep records, track performance and lend securities for institutional investors. They also manage money for individuals and institutions. “Shifts of this size are pretty rare,” Jonathan Watkins, editor of Global Custodian, a London-based publication that covers the industry, said in a telephone interview. “Big managers tend to keep these custody relationships in place for decades.”