New Jersey Division of Investment, Trenton, is searching for a custodian. The search is the result of a change in state law that now allows the $67 billion system to contract with an out-of-state custodial bank if it has a branch in New Jersey, said Steven E. Kornrumpf, director. Previously, custodial banks had to be based in New Jersey. Mr. Kornrumpf hopes to find lower fees and expanded services by shopping around.
First Union, which acquired New Jersey-based First Fidelity Bank, handles most of the funds domestic custody. Bankers Trust New Jersey, now part of Deutsche Bank, handles much of the global custody. Mr. Kornrumpf said bank mergers over the years left few candidates among New Jersey-based banks.
The system hired Callan to help conduct the search. A decision is expected in March, Mr. Kornrumpf said.