Tim Helyar

State Street has released the first module of Reimagining Retirement^[1], a comprehensive research series examining how macro forces are transforming retirement systems worldwide and where financial services can respond with scalable solutions.

Drawing on analysis of 15 countries across North America, Europe, Asia-Pacific, Latin America, and the Middle East, the research identifies five critical forces reshaping retirement: demographic aging, socioeconomic shifts (including the rise of gig work), technological disruption, rising longevity, and mounting fiscal pressures. The report reveals that despite vastly different system designs, every country faces challenges balancing fiscal sustainability with retirement adequacy, and most are converging toward portable defined contribution models and flexible decumulation.

Australia’s retirement system is a multi-pillar model, balancing adequacy, sustainability and broad coverage. It is often cited as a benchmark among Anglo-American countries for its integration of public and private provision, and its adaptability to changing economic conditions.

“Australia’s retirement industry has become a A$4.33 trillion super system, placing the system on par with the combined balance sheets of major banks,” said Tim Helyar, country head for Australia at State Street. “It is more than an ‘individual’ concern but a system that influences the wider economy, capital markets and national financial stability. The scale also creates significant opportunity for the financial services industry.

“With annual contributions near A$160 billion and withdrawals around A$120 billion, Australia is approaching the inflection point where decumulation or retirement overtakes accumulation.”

“Decumulation has moved to the centre of the retirement agenda,” said Jonathan Shead, Head of Investments in Australia at State Street Investment Management. “The question is no longer how much Australians have saved, but how reliably those balances can be translated into income for life. Australia is a gold standard, poised to build one of the best retirement systems in the world. We believe as an industry, have both the opportunity and the responsibility in standardising a simple default pathway, combining guided drawdown with risk pooling and partial annuitisation or deferred income components.

“Giving Australians predictable income, flexibility when circumstances change, and clear guardrails that reduce the risk of poor sequencing or longevity outcomes are critical.”

Helyar added: “Super funds’ rising private markets allocations and data-driven decisioning are unlocking performance and personalisation opportunities. Millennials and Gen Z are intensifying digital engagement with superannuation, driving investment in mobile first platforms, personalization, and fintech partnerships that capture attention and flows.”

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Notes:
[1] https://www.statestreet.com/au/en/discover/reimagining-retirement/shifting-global-landscape

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Stefan Gmuer

State Street Corporation (NYSE: STT) has announced that it has been selected by Challenger Limited, a publicly listed Australian investment management firm, to provide custody and, through State Street Alpha®, back-, middle- and front office investment administration services, for a suite of listed and unlisted investment vehicles with A$127 billion^[1]

In this new client relationship, State Street will be the custodian and investment administrator for the entire Challenger group, comprising funds management that includes the multi-affiliate platform Fidante, fixed income platform Challenger Investment Management, and Challenger Life, the leading provider of annuity products in the Australian market.

“This partnership is very important for State Street,” said Stefan Gmuer, head of Asia Pacific and head of Strategic Business Growth at State Street. “The mandate reaffirms our front to back proposition which brings value, scale and efficiency to our clients who are looking to accelerate their own growth and transformation. It also further cements our position as a leading provider of choice for large, sophisticated transactions.”

Challenger will be one of the largest investment managers in the region to deploy the State Street Alpha® platform, an asset servicing platform integrating the front, middle and back office from a single provider.

“State Street has a strong track record in servicing investment managers and institutional clients.” said Nick Hamilton, managing director and chief executive officer of Challenger. “Their leading technical capability, platform investment and global footprint will support our business and affiliates to help execute on the significant opportunity ahead, at the same time as delivering a high-quality service and innovation for our affiliates and clients.”

With this 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 which is 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 and will bring tremendous expertise to State Street’s Australian business and the firm at large.

“As we welcome Challenger as a new partner, we are excited to be adding a large number of talented and experienced investment management and fund administration professionals to our team here in Australia,” said Tim Helyar, Australia country head at State Street. “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.”

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Notes:
[1] Source: Magenta, as of June 30, 2024 in assets under management.

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Tim Helyar

State Street Corporation (NYSE: STT) has announced that it has been chosen as custodian and administrator for the more than A$30 billion in funds invested for members of Brighter Super.

State Street will provide a sweeping range of services to Brighter Super’s more than 130 portfolios across multiple asset classes including equities, fixed income, private assets and derivatives.

Brighter Super Chief Financial Officer Garnett Hollier said: “After a competitive tender process, we selected State Street as we believe they have the proven capability in servicing superannuation funds, the global network and scale, as well as local presence in Brisbane and an extensive superannuation client community that will bring enormous benefits to our members.”

State Street Country Head, Australia, Tim Helyar said: “This significant mandate further demonstrates State Street’s commitments not only to Australia’s superannuation industry but also Queensland as an important on-the-ground location for servicing our clients.”

“We are excited to partner with Brighter Super as it transforms its operations following its recent mergers,” Mr Helyar said.

Under the new mandate, State Street will provide Brighter Super fund accounting and unit pricing, custody, administrative services, alternative investment services, taxation services, financial and regulatory reporting, performance and analytics, investment mandate monitoring and securities lending.

Brighter Super has sought to use the increased size it gained from the merger of LGIAsuper and Energy Super in 2021 and the acquisition of Suncorp Super, which was completed last year, driving efficiencies of scale and fee reductions for most members.

“At Brighter Super, we recognise both the need for, and the opportunity arising from, the current industry consolidation because we have been a part of it with our own series of mergers,” Mr Hollier said. “One of the major benefits is attaining sufficient scale and being able to take full advantage of technological advancements, and this is what our partnership with State Street will allow us to do.”

Mr Helyar said as super funds grew their assets and membership, it was increasingly important to harness the best technologies and capabilities available through their partners.

“Many funds realise the transformative potential of data but many lack the necessary technical capability, which is why State Street’s systems, expertise and experience are a valuable fit,” Mr Helyar said. “We look forward to embarking on a long-term partnership with Brighter Super.”

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Frank Koudelka

State Street Corporation (NYSE:STT) has announced the Australian launch of its Fund Connect ETF Portal – a global online portal for the creation and redemption of exchange traded funds (ETFs), designed as a single point of access to many issuers.

“Australia is one of the fastest growing ETF markets in the Asia Pacific region and this portal will be an important solution to meet the needs of clients in the country,” said Tim Helyar, country head for State Street in Australia. “Since 2018, ETF assets in Australia have risen from AU$41 billion to AU$147 billion^[1] , a compound annual growth rate of 29 percent.”

Frank Koudelka, head of global ETF product solutions, State Street, said the Australian portal is going live following the successful launch of the portal last year in Singapore as the first market in Asia Pacific.

“Our newly launched Fund Connect ETF portal will complete State Street’s ETF servicing solutions in Australia, bringing clients a dynamic suite of offerings to meet the growing ETF markets,” said Koudelka.

“For more than 15 years, Fund Connect ETF has been serving as a conduit between authorised participants (APs) and issuers globally. It provides a single point of access to approximately 1,100 ETFs in multiple currencies from more than 50 leading issuers. Currently, the portal has around 95 APs.

“In the Australian ETF market, the creation and redemption process still relies heavily on manual tasks including faxes,” said Lori Coakley, global head of Fund Connect ETF at State Street. “We believe an electronic trading solution like the Fund Connect ETF Portal will bring significant value to ETF issuers and APs in Australia.”

“Importantly, it will allow them to scale their businesses, drive efficiency and reduce operational risks,” she added.

Fund Connect ETF’s automated order placement solution, and comprehensive integration into order management systems, supply a direct link between market makers, APs, distributors, transfer agents, sub-advisors and sponsors, along with direct access to ETFs.

“State Street has 30 years of experience servicing 47% percent of ETF assets globally,” said Koudelka. “Our long and deep experience has guided ETF issuers in Australia with industry best practices, and offers them the most sophisticated tools to benefit from economies of scale.”

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Notes:
[1] ETFGI Asia-Pac ETF, 06/30/2023

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George Boubouras

K2 Asset Management has announced the appointment of State Street Australia Limited, an indirect wholly-owned subsidiary of State Street Corporation (NYSE: STT), as the fund administrator and custodian in Australia for the Cosmos Purpose Bitcoin Access ETF (Cboe: CBTC), Australia’s first cryptocurrency ETF ultimately backed by physically settled Bitcoin.

The partnership sees State Street administering and providing custodial services in Australia to a fund that provides Australian investors with exposure to cryptocurrency via a registered managed investment scheme listed on Cboe (formerly Chi-X Australia). In turn, the scheme invests in a listed offshore fund whose holdings include Bitcoin.

“K2 Asset Management is very pleased to work with State Street and other key stakeholders to deliver a sustainable solution in the increasingly important digital and crypto segment for investors” said George Boubouras, Executive Director of K2.

CBTC’s underlying asset is the Purpose Bitcoin ETF which is managed by Purpose Investments and quoted on the Toronto Stock Exchange. The Purpose Bitcoin ETF has been established to buy and hold substantially all of its assets in long-term holdings of Bitcoin.

CBTC will track the total return performance of the Purpose Bitcoin ETF, with the unique structure giving investors an efficient way to gain exposure to the Bitcoin asset class on an Australian regulated exchange.

“Demand for cryptocurrencies is growing among Australian investors and ETFs are a cost effective and efficient vehicle to gain exposure to this emerging asset class. However, the nature of cryptocurrencies adds new complexity to the traditional ETF operating model,” said Irfan Ahmad, State Street Digital APAC product lead. “ETF issuers need a trusted partner that has extensive experience servicing ETFs across multiple geographies and understands the intricacies of administering digital assets. We are pleased that K2 Asset Management has chosen State Street to be their partner.”

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