Nest has appointed Northern Trust to be its new fund administrator, coordinating the pension scheme’s investments across its diversified portfolio.
Northern Trust has won the contract from State Street Corporation, the US parent company of asset manager State Street Global Advisors, which has been the fund administrator for Nest for 15 years.
Northern Trust will now provide key services for Nest’s investment strategy, including custody, asset allocation and rebalancing, and performance measurement.
The new partnership will oversee substantial growth in Nest, with the scheme forecast to pass £100bn of assets under management in 2030. It is currently the largest DC pension scheme in terms of the number of members.
SSGA was one of a number of US asset managers that recently withdrew from the Climate 100+ coalition — set up to help co-ordinate stewardship activity from major shareholder when dealing with the world’s most polluting companies in a bid to get them to reduce carbon emissions.
Nest has been a vocal supporter of ESG investment initiatives, particularly around climate change.
Nest Invest CEO Mark Fawcett says: “Within the coming years, we’ll likely be the largest UK pension scheme by both AUM size and membership. We’ve needed to consider how we manage that growth to ensure we continue delivering a world-class service for our 13m members.
“The fund administrator is one of our most important contracts. It provides the platform to manage growth across our highly diversified portfolio, including enhancing the member journey across our range of funds as we implement our private markets program.
“Northern Trust impressed us in what was a competitive procurement. We have specific requirements for asset allocation and rebalancing, and their capability to manage sophisticated strategies is particularly strong. The flexibility they can offer, to evolve the services we need around our future growth, will be crucial.”
Northern Trust head of asset owners, UK Ian Hamilton adds: “This mandate is testament to Northern Trust’s track record in supporting complex asset owners deliver transformative change.”
James Wright, head of asset owners (EMEA) at Northern Trust adds: “Our appointment by Nest underscores Northern Trust’s commitment to the retirement sector, and cements our leadership position in supporting the increasingly sophisticated needs of asset owners in the UK and across the EMEA region.”