Challenger outsources custody and admin to State Street

State Street has picked up one of the most important custody and investment administration mandates of 2024 in being appointed to the role by Challenger Limited which has effectively outsourced the function.

Challenger announced that it had appointed State Street to the role with the agreement commencing next month but with the full transition expected to be completed in 2027.

Challenger said that the move would allow it focus on its core strengths of retirement services and investment management.

State Street said it would be the custodian and investment administrator for the entire Challenger group, comprising funds management and including multi-affiliate platform Fidante, fixed income platform Challenger Investment Management, and Challenger Life.

It said that the mandate would mean that approximately 100 Challenger employees will transfer to State Street after period of consultation but will continue to focus on the Challenger suite of listed and unlisted investment vehicles.

The announcement said David Mackaway, the current chief executive officer of Artega, a venture which is majority-owned by Challenger, and members of his management team will also be joining State Street.

Commenting on the mandate decision, Challenger managing director and chief executive, Nick Hamilton said State Street was ideally placed to support Challenger’s growth ambitions.

“In selecting a world leader to uplift our investment operations technology and capability, it will allow us to further focus on our core strengths of retirement services and investment management,” he said.