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Mission critical
qualities of
global custodians

OVERVIEW

As asset managers and asset owners seek a greater universe of investment options, emerging markets and frontier markets are increasingly appealing. While these markets bring new opportunities, they also bring new challenges. Operational areas that are generally well established, tightly controlled and routine for developed markets might be anything but in these markets.

This investment trend in emerging and frontier markets will likely continue to accelerate and evolve, which is why it is critical for an asset manager to take a thoughtful approach to selecting the right custodian—one that brings the knowledge, skills and client service models to help successfully navigate this uncharted territory.


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Mission Critical Qualities of Global Custodians

InsideOps | Insights for Operations Leaders in Asset Management

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“CUSTODY MIGHT BE A COMMODITY FOR DEVELOPED MARKETS, BUT IT’S MISSION CRITICAL IN EMERGING AND FRONTIER MARKETS.”

GIRARD HEALY
MANAGING DIRECTOR

TRAITS TO LOOK FOR

To successfully operate in emerging and frontier markets, asset managers should team up with custodians that can deliver:

Extensive local knowledge

Extensive local knowledge. Industry best practices are not always well established in emerging and frontier markets. Leading custodians can help shape the marketplace by participating in local market industry groups and meeting regularly with market regulators to promote reform and enhancements.

Optimal safekeeping of assets

Optimal safekeeping of assets. Safekeeping arrangements differentiate global custodians. Asset managers must have a clear understanding of available structures and their risk parameters. When a choice does exist, legal experts and custodian domain experts could support fact-based decision making and risk assessment.

Robust functional capabilities

Robust functional capabilities. Regardless of the in-scope markets, custodians need the ability to efficiently process the core back-office functions required to settle transactions, account for entitlements and custody assets.

Tailored client service models

Tailored client service models. Effective models provide direct coverage by client service specialists and relationship managers who are familiar with each client’s business and who possess broad domain experience in the markets and in-scope assets.