Negative media stories about the appointment of a foreign company as the custodian for the Future Fund demonstrates a lack of understanding, according to a consultant.
"Some general media comment recently has not shown a complete understanding of the use of custody specialists in Australia by the Future Fund," Morse Consulting director Ian Perkins said.
On May 17, the Future Fund appointed United States-based custodian Northern Trust.
The Chicago-headquartered firm beat locally-based custodians State Street and NAB Custodian Services. Debate in some parts of the media began about whether it was appropriate to hire a foreign custodian to manage the $51 billion fund.
"If we had been involved in their selection process then we would have been very open to the appointment of a leading global custodian, regardless of location, provided they could demonstrate an ability to provide services within the context of Australian regulation and standards," Perkins said.
"What the deal with Northern Trust does highlight is the fact that operational and technology support to the investment industry is becoming increasingly global in nature. Many of the core functions of a custodian are now automatic."
Yesterday, the federal Labor Party linked Northern Trust with the Enron Pension Fund collapse.
Senator Nick Sherry told a senate committee the custodian was the trustee for Enron's superannuation fund and was alleged to have breached a duty of care.
