Focus On: Operations
Measuring Operational Risk: Part Science, Part Art | Licensing Ops Execs: Great Idea, Bad Execution? | Reducing Operational Errors With OTC Derivatives | A DAY IN THE BACK OFFICE:
Eliminating Operational Risk at a Transfer Agency | Giving a Single Name a Single Identity | TOP OPS EXEC: Timothy Doar, CME Clearing | TOP OPS EXEC: Mike Fish, SWIFT | TOP OPS EXEC: Patrick Kirby, DTCC | TOP OPS EXEC: John McCorvey, Gar Wood Securities | TOP OPS EXEC: Jeff Gooch, MarkitServ | TOP OPS EXEC: James Malgieri, BNY Mellon | TOP OPS EXEC: Hans Hufschmid, GlobeOp Financial Services | TOP OPS EXEC: Conrad Kozak, JPMorgan Chase
TOP OPS EXEC: Conrad Kozak, JPMorgan Chase
May 4, 2011
NAME: Conrad Kozak
TITLE: CEO, Worldwide Securities Services
COMPANY: JPMorgan Chase
KEY FOCUS: Reduce systemic risks in asset management and trading
“We leverage our scale and capa- bilities in more than 100 markets to help clients through a broad range of investor services such as custody, fund accounting and administration and securities services, as well as securities clearance, collateral management and alternative investment services,” he said.
The effort appears to be working, under Kozak’s oversight.
In 2009, WSS won – through a com- petitive process – the largest custodian mandate of the year when it was selected to serve as custodian for the $500 billion U.S. Federal Reserve program to purchase mortgage-backed securities (MBS).
The program was designed to purchase up to $500 billion in such securities backed by Fannie Mae, Freddie Mac and Ginnie Mae. The goal was to foster improved conditions in financial markets. At present, the trading part of the program has ceased, but JPMorgan continues to act as the custodian of the assets.
Participants involved in the investment management side of program were BlackRock Financial Management, Gold- man Sachs Asset Management, Pacific Investment Management (Pimco) and Willington Management.
In 2010, WSS won custody and related service mandates that included John Lewis Partnership Pensions Trust, which has in excess of $1.2 billion in total assets under management; Transatlantic Holdings, Inc., an international reinsur- ance organization with $11 billion under management; BankInvest, an asset man- ager and provider of investment funds in
the Nordic region with $23 billion under management and administration; Nasdaq OMX, which appointed JPMorgan as custodian for its derivatives markets; and AQR Capital Management, the adviser to AQR Funds, which required a full suite
of fund administration, prime-custody and related services for the firm’s mutual funds, with more than $2 billion in assets.
In terms of expansion activities, the firm completed the migration of direct and master custody clients related to the unit’s acquisition in 2009 of Australia and New Zealand Banking Group (ANZ) for an undisclosed amount.
Kozak cites this as one of the key developments of the past year. He points out that “the completion of the ANZ project enables us to meet the needs of clients with cross-border investments in Australia and New Zealand and to add new clients seeking local custody and clearing services and grow these relation- ships globally.”
In May of 2010, WSS signed an agreement to acquire the private eq- uity administration services business of Schroders which at the time had $6.2B in committed capital under administration.
Also in 2010, WSS launched De- rivClear, a centralized over-the-counter derivatives platform for trade capture, confirmation control, settlements, and lifecycle management. “Clients can access it online for a wide range of OTC prod- ucts across multiple asset classes, includ- ing credit, rates, equity and FX,” he said.
How does he plan to continue to grow his offering?: By offering a full range of products and services to suc- cessful, growing asset managers on a global basis. As Kozak explains it: “The prerequisites for success (in this business) are a global capability-set coupled with competitive pricing, which is only pos- sible in the long term to those players with scale.”