Caceis dominates European depository market for real assets

Five mandate wins this year build on a dozen racked up in 2014

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Caecis has won 17 mandates since the beginning of 2014

Caceis continues to dominate segments of the depository market in Europe, focusing particularly on Germany, and on real estate funds, having announced 17 mandate wins since the start of 2014, servicing at least €44 billion ($47.3 billion) for such clients. In 2013, it recorded a further seven wins, at least one worth €20 billion.

In the past quarter alone, the French custodian racked up five new clients, the largest announced being Frankfurt am Main-based IVG Institutional Funds, a real estate specialist. IVG has transferred a €6.3 billion portfolio to Caceis from former depository Sal Oppenheim after the latter announced in May 2014 the transfer of its depository function for real assets to Caceis, subject to the approval of clients.

KGAL Investment Management, which has been managing real assets since 1968, awarded Caceis in Germany a depository mandate for its eight closed-end funds. The real assets include real estate funds as well as alternative assets such as aviation and renewables, which amount to a total of €1 billion in assets.

Other client wins in the period under review include France’s Acer Finance for which Caceis will also be responsible for the execution and clearing of derivatives, Italian real estate management company IDeA Fimit for a vehicle invested in 113 buildings, and Germany’s IntReal for a fund investing in multistorey car parks in the Netherlands.

Caceis says it is the leading independent depository in France and Germany for real estate funds, is consolidating its position among key players in Italy’s real estate fund service sector, and holds a prominent position in Luxembourg’s and Switzerland’s markets.

Societe Generale Securities Services (SGSS) also saw continued success across Europe with four new clients announced, led by Inarcassa, a national social assistance fund for self-employed engineers and architects, to act as its depository bank.

SGSS was also mandated by French state reinsurance company Caisse Centrale de Reassurance for its Solvency II offering. The Solvency II directive, which is due to come into effect on January 1, 2016, will see a significant increase in the frequency and level of data to be communicated to regulators. SGSS has developed a modular service offering for its institutional investor and asset manager clients, which includes look-through reporting for funds and structured products, market risk solvency capital requirement calculations, risk indicators for financial assets, and associated reporting.

SGSS’s mandate with IP Valmy in France is for its entire range of funds, managed by 10 asset management firms. Since 1995, IP Valmy has operated a supplementary pension fund through which employees build up pension entitlements paid out as an annuity following retirement, funded primarily by means of employer contribution and sitting alongside compulsory basic and supplementary state pension schemes.

Societe Generale’s appointment as custodian, clearing broker and certificate issuer to Progressive Capital Partners, a Switzerland-based alternative investment management group, relates to Progressive’s new Linden Core Fund 1x and Linden Core Fund 2x, which are both Irish-domiciled commodity trading advisers authorised as Ucits-compliant. Progressive has assets under management of $680 million.

A third France-headquartered custodian, BNP Paribas Securities Services, has been mandated to provide custody, settlement and liquidity services to four major Italian banks. The contracts come ahead of Italy’s move to the new Target2-Securities (T2S) pan-European trade settlement platform in June that will harmonise cross border settlement.

Alessandro Gioffreda, head of BNP Paribas Securities Services for Italy, says Italy will pioneer T2S, becoming the first major market to move all securities transactions to the platform.

BNP Paribas Securities Services will also provide a range of back-office services to Liquidnet, an institutional trading network that connects more than 770 asset managers to source investment opportunities in block size across 43 markets globally. As part of the mandate, BNP Paribas Securities Services will handle Liquidnet’s post-trade activity in Hong Kong and provide Liquidnet with US broker-dealer services. This complements the Asia-Pacific service by ensuring adequate compliance with the Securities and Exchange Commission rules when processing transactions related to Liquidnet’s US customers.

James O’Sullivan, head of client development, banks and broker dealers at BNP Paribas Securities Services Hong Kong, says: “We are seeing more and more organisations in Hong Kong and Singapore partnering with specialist post-trade service providers when expanding abroad and when adapting to international regulations such as derivatives clearing, trade reporting and new capital requirements.”

Admin Re selected HSBC as provider of policyholder investment accounting and global custody for approximately £16 billion of assets under management in the UK. The appointment follows a tender by Admin Re, which acts as a closed-book consolidator of life and pensions policies. A large part of the HSBC team for Admin Re will be based in Scotland.

Lastly, BNY Mellon, through its subsidiary BNY Trust Company of Canada, was appointed depository and collateral agent by Canadian Solar, a manufacturer of solar panels and a provider of solar energy solutions, for four power plants in the Province of Ontario, Canada.

These power plants, with total generating capacity of 40 megawatts, once completed, will sell electricity to the Ontario Power Authority pursuant to a 20-year feed-in tariff contract.

As depository and collateral agent, BNY Mellon will be responsible for processing authorised payments to Canadian Solar vendors during the construction and operation phases of the power plants and for holding the collateral on behalf of lenders.

Asset-servicing mandate wins (December 2014–March 2015) (PDF)

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