UK - Paternoster, the defined benefit pension insurance group, has extended its existing relationship with State Street.

State Street said that, in addition to custody and securities lending, it would now provide Paternoster with collateral management services. Financial terms were not disclosed.

"Collateral management is particularly important given our complex liability-driven investment style," said Mark Wood, Paternoster's chief executive.  "We trust State Street to help us achieve our aim of delivering the best possible returns whilst minimising risk and cost effectively."

"Our relationship with Paternoster is a strong indication of our success in what is a vital market segment for us," said Alasdair Reid, head of State Street's asset owner group in the UK.

"Following recent market volatility, we expect more and more closed defined benefit schemes to transfer their liabilities to the bulk annuity market. As this happens, providers like Paternoster will become increasingly significant players in the financial services industry. In growing our relationship with Paternoster we are delighted to build upon the strong foundation we have established."

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