State Street is broadcasting its pleasure at a successful client conversion process in the Asia-Pacific region from its $1.5 billion acquisition of Deutsche Bank's global custody business from February, 2003.

It says it has retained virtually the entire book it acquired, including Hong Kong Baptist University, Hong Kong Jockey Club, a top Japanese insurance company and two fund management houses, Deutsche Asset Management and UOB Asset Management. Its first client conversion, Hong Kong Electric, made the commitment in May last year. The business covers not just custody but fund accounting and performance measurement.

Deutsche's global custody business had amounted to $2.2 trillion in assets; that firm still retains its sub-custody business worldwide.

A good deal of the smooth transition is State Street's decision to incorporate many of Deutsche's employees, including Leow Chong-jin, who had run the Deutsche operation in Singapore and moved to Hong Kong as Asia CEO for investor services at State Street, under regional CEO KK Tse.

"It was gratifying to see that the same client servicing team was assigned to implement the process to ensure continuity," says Jacob Tsang, treasurer at the Jockey Club.

Another factor State Street has used to keep its customers - all of which engaged in a service provider review upon news of the sale last year - was upgrading the technology and services previously offered by Deutsche to include areas like compliance reporting and commission recapture. The firm declined to comment on fee arrangements.

Leow says the next big priority is to get regional fund managers to outsource their back- and middle offices to State Street. Deutsche Asset Management was the first client to do this, having already outsourced it to Deutsche's custody unit. State Street will be targeting both major regional houses such as UOB as well as the regional arms of global players like Deutsche. The firm is also looking to build a regional transfer agency capability in order to become a contender in the retail fund administration space.