UN fund enters 21st century

"We built an infrastructure... Basically we retired our fax machine." Suzanne Bishopric

With total portfolio costs of only 15.3 basis points, the $43-billion United Nations Joint Staff Pension Fund is one of the most efficiently run pension funds in the world – not bad for a fund that has investments in 41 countries and 23 currencies. This year it embarked on an operations overhaul to bring even more efficiency to its investment management.

The fund claims to be the world’s most globally diversified pension fund: not only are its investments in 41 countries and 23 currencies, it serves 23 different member organisations scattered all over the globe.

This year it joined the twenty-first century with an investment-operations overhaul designed to bring further stability to its investment approach as markets continue to be volatile.

“Underneath the mess in markets, we built an infrastructure we think every fund should have. Basically we retired our fax machine,” says Suzanne Bishopric, director of investments at the United Nations Joint Staff Pension Fund (UNJSPF).


Of the world and in the world

The fund now has an integrated trade-order-management system, which is fully integrated with SWIFT and matched with an independent master record keeper

In the past the fund followed its own UN-accounting standards – not those standards adhered to throughout the world.

“We are now using accounting standards, followed throughout the world, that are robust. This has allowed us to do a lot of other good stuff like monitor brokers. We know within a minute if a trade has been executed. It gives us great monitoring power and the risks of mistakes are less.”

The fund is monitoring any distinction in transaction-execution costs in a quarterly report and Bishopric says it’s starting to pay off.

United Nations Joint Staff Pension Fund: Ajit Singh, deputy director for risk; Suzanne Bishopric, director, investments; Toru Shindo, deputy director, investments.

“We have learnt that you don’t have to reinvent the wheel. There are standardised products out there and if you take a modular approach to it then you don’t disrupt your operations. We started with the payments side, then our trade-order-management system, so we can keep brokers honest. The trade-matching and affirmation software keeps settlements safer and this is important for us because we’re global,” she says.

It isn’t a joke that the fund has “retired its fax machine”; until this digital technology was introduced it was still using faxed orders.

“We would send a fax to Brazil and get a reply the next day. Now we are as close to the state of the art as any fund; we’ve leapfrogged some intermediate technology,” she says. “We went from a green field to state of the art. But there is an advantage to being a latecomer: we can see what is tried and true and what the industry standards are.”

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