NEST picks Northern Trust for admin, custody

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The UK workplace pension scheme NEST has appointed Northern Trust as its new fund administrator and custodian, helping the scheme coordinate its investments across its diversified portfolio.

Through the newly awarded contract, Northern Trust will provide key services for NEST’s investment strategy, including custody, asset allocation and rebalancing, and performance measurement, the fund announced.

The new partnership will oversee substantial growth in NEST, with the scheme forecast to pass £100bn (€116.3bn) in assets under management (AUM) in 2030. “This contract is therefore of significant importance to the continued success of NEST,” it stated.

Mark Fawcett, NEST’s chief executive officer, said: “NEST is at an exciting point in our journey. 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 13 million members.”

He added that the administrator contract is one of the most important for the scheme as it “provides the platform to manage our growth across our highly diversified portfolio, including enhancing the member journey across our range of funds as we implement our private markets programme”.

Fawcett said NEST has specific requirements for asset allocation and rebalancing, and Northern Trust’s capability to manage sophisticated strategies was particularly strong. “The flexibility they can offer, to evolve the services we need around our future growth, will be crucial,” he noted.

Ian Hamilton, head of asset owners, UK, at Northern Trust, said: “This mandate is testament to Northern Trust’s track record in supporting complex asset owners deliver transformative change and we are thrilled to partner with the UK’s largest defined contribution master trust and a leading innovator in the pension sector.”