State Street has been appointed as the custodian and investment administrator for Challenger Limited, a publicly listed Australian investment management firm with A$127 billion (US$85.38 billion) in assets under management.

Challenger says the agreement will support its strategy to drive growth through its core strengths in retirement, investment management and asset origination.

Challenger, Fidante and its affiliates will benefit from State Street’s advanced technology, capability and scale, including its Alpha platform which integrates front-, middle- and back-office functions with custody services.

As Challenger focuses on meeting more customer and client needs, State Street’s global administration platform will support a range of new business initiatives, the Sydney-based company says. In a rapidly changing technology environment, Challenger will also benefit from State Street’s ongoing investment in its platform.

The agreement will commence in October 2024 and deliver scale and capability benefits for Challenger once all investment administration and custody services have transitioned to State Street, which is expected to be completed by early 2027.

“As Australia’s leader in retirement income, and through Fidante, a partner to many of Australia’s best-known boutique funds management brands, State Street is ideally placed to support our 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,” says Challenger managing director and chief executive officer Nick Hamilton.

“State Street has a strong track record of servicing investment managers and institutional clients. Their leading technical capability, platform investment, and global footprint will support our business and affiliates in executing on the significant opportunity ahead, at the same time as delivering a high-quality service and innovation for our affiliates and clients.”

With the mandate, approximately 100 Challenger employees will transfer to State Street in October, after a period of consultation. They will continue to focus on investment administration services support for Challenger’s suite of listed and unlisted investment vehicles.

David Mackaway, the current chief executive officer of Artega, a venture majority-owned by Challenger, and members of his management team will also be joining State Street.  Mackaway has more than 25 years of experience in the asset servicing and investment management industry.

“By growing our talent pool, we are enhancing our capacity to meet and exceed the increasingly complex needs of our clients in Australia. We will continue to invest and strengthen our servicing capability as part of our commitment to the Australian market,” says Tim Helyar, State Street’s country head for Australia.