HSBC stages fund-services coup in Singapore

Feb 11, 2010

Schroders Singapore chooses HSBC Securities Services as its sole trustee, custodian and fund administrator, having previously split those services between HSBC and OCBC Trustee.

Schroder Investment Management has appointed HSBC Securities Services (HSS) as its sole trustee, custodian and fund administrator in Singapore, dropping local provider OCBC Trustee.

Schroders Singapore previously split its trust, custody and fund-admin needs between the two firms. "Consolidating the services under HSS gives us better service leverage and control, not just locally but also regionally," says Lilian Tham, Asia-Pacific head of operations and IT at Schroders.

The mandate covers 15 unit-trust funds, which between them manage assets of S$3 billion ($2.1 million). Schroders will continue to use RBC Dexia for local transfer-agency services.

Since the early 1990s, Schroders Singapore used Bank of Bermuda to service its local funds. This mandate moved to HSBC when the institution bought the smaller provider in 2003.

For the new mandate, Schroders put out a request for proposals in August last year, selected HSS in October and finished transferring services to the new provider on January 1.

Since the credit crunch in 2008, asset managers have tended towards quality institutions and reducing risk when appointing a service provider, often by increasing the number of financial institutions with which they have relationships.

While Tham agrees this is the case, she says that for a smaller operation, such as Schroders in Singapore, it's more effective to consolidate trustee, custody and fund administration services under one provider. "Regionally, we take a much more diversified approach," she adds. "I don't believe there is a service provider who can provide a consistent service across the [Asia-Pacific] region."

HSS also provides securities services to Schroders in Hong Kong, while the manager uses Citi in South Korea and Deutsche Bank in Indonesia.

Susan Soh, Schroders' country head for Singapore, recently told AsianInvestor that the firm focuses on innovation and new products to stay ahead of its competition. Much of this product development work is done in Singapore, the manager's Asia-Pacific hub.

Globally, Schroders managed $222.2 billion on behalf of institutional and retail investors as of the end of September.

On the same date, HSS had $4.9 trillion in assets under custody and $2.7 trillion in assets under administration.