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The service is aimed at funds with assets under management of between $700 and $900 million. Using this service, pension funds investing in commingled funds have the ability to use transition management to make changes in investment strategy and increase the ability to hedge and mitigate risk, the bank says.
Pension funds that don't have the benefit of a global custody account to hold their securities while in transit can use the service to give them access to clear the assets through an interim clearing network.
"Clients who lack the ability to trade and settle their portfolios in non-US securities are exposed to greater risk during the transition process if the trade involves a large cash funding component,ö says Kal Bassily, managing director and global head of BNY ConvergEx group's global transition management business.
ôWe have created a solution that gives them the option via an interim clearing network, to clear and settle their trades without having a custody account. This means they contribute securities instead of cash, which will help to minimise risk exposure, also they donÆt have to incur the cost of a global custody account or deal with time lags," he adds.
BNY ConvergEx has so far signed up two unnamed clients both in Europe, one of which has reported savings of 2%, it says, after moving securities from a one global portfolio to another.
Asia remains a key growth market for the group, according to Bassily.
"In Asia, in certain markets, the pension systems are in the early development stage and they tend to be smaller to medium in size," he says. "In addition, many of the larger pension funds in Asia are only now beginning to invest in global equity markets. Therefore they donÆt have the custody accounts to facilitate investments into global markets. This is where we can provide value."
BNY ConvergEx specialises in global agency trading in over 94 markets worldwide, including global portfolio trading, single stock and block-trading, portfolio rebalancing, foreign exchange and liquidations.
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