US - State Street could lose its master custody mandate with the US$180bn California Public Employees Retirement System (CalPERS) when the fund re-tenders the brief later this year.
State Street Bank has provided master custody services for the fund since 1992, with the current contract set to expire on June 30, 2006.
The contract was awarded for a three-year term plus two one-year options and CalPERS is in the process of amending the contract to exercise the final year.
In its investment committee meeting agenda for May 16, the fund announced plans to re-tender the brief in August this year. In addition, the fund will change its performance reporting from a monthly to daily process, effective July 1, 2005.
The fund has built in a three-month period prior to June 30, 2006, to allow for a potential transition to a new master custodian.
CalPERS has also requested proposals from its general pension spring-fed pool of consultants to assist with the custody search.
“The pool consultant will assist in identifying industry-wide custody best business practices in developing the master custody services RFP, particularly the scope of services,” the fund said.
Explaining the reason behind the change from monthly to daily reporting, the fund said: “The move to daily performance reporting will provide a contemporary platform to support enhance portfolio management, compliance risk and analytical processes needed to make informed decisions about the fund.”
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