BRAZIL - Mellon Global Investments has won Brazil's first ever mandate to act as the overall fiduciary administrator of a Brazilian pension fund.
Mellon Brascan DTVM, Mellon Global Investments’ Brazilian business, has been appointed to manage the mandate for Petros, the pension fund for the employees of oil company Petrobras. It is believed to be the largest mandate for asset servicing ever awarded in Latin America.
Fiduciary services to be provided include:
- Administration of all Petros investment funds, managed on a segregated basis by 17 third-party fund managers;
- Risk analysis for fixed income and equity funds, including daily value at risk calculations and stress testing;
- Daily pre-settlement risk monitoring and compliance to ensure the trades in the segregated funds comply with pre-determined parameters, including risk control and analysis, legal compliance and credit ratings;
- Price settlement bands for illiquid assets, in order to avoid mispriced transactions, based on a proprietary pricing methodology.
Petros is Latin America’s second largest pension fund with total investible assets of R$13bn (US$3.56bn).
Mellon Brascan will be the first company to introduce these sophisticated services to the Brazilian market. Its remit will be to help Petros manage the pension fund’s risks and introduce greater transparency for the pensionable employees of Petrobras.
Petros is the first pension fund in Brazil to have a trustee to oversee compliance with its by-laws on a proactive basis. The initiative aims to increase the transparency of the fund’s investments and rules, and significantly reduce the operational risks involved in the institution’s investment activities. This transparency will be present in the fund’s website, which will be updated on a regular basis.
This is another major win for Mellon Brascan in Brazil, which marked its presence in the market earlier this year with an asset servicing mandate from Volkswagen.
Eliane Lustosa, investment director of Petros, said: In appointing Mellon, we have taken a significant step for the Brazilian pensions market.
“After a thorough review, we felt Mellon Brascan had the breadth and depth of experience necessary to meet the high standards demanded by the Petrobras pensions team.
Diego Martinez, president of Mellon Brascan, said: Mellon’s vast experience in asset management and asset servicing, in which it is a global market leader, will enable Petros to continue to be at the forefront of managing its pension fund to world-class standards.
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