State Street Wins $215B Principal Funds Back-Office Mandate

Principal Financial Group hired State Street to handle custody, fund accounting and fund administration for its $215 billion fund line, the firms announced Thursday.

Doing so positions Principal “to be operationally ready should it decide to offer an ETF share class,” a Principal spokesperson wrote in an email.

Principal was among nearly two dozen fund shops to receive approval from the Securities and Exchange Commission in April to roll out products with both mutual fund and ETF share classes.

State Street provides back-office services to ETF share classes launched by Dimensional Fund Advisors and Thornburg Investment Management. The service provider was listed as custodian for at least 40% of the firms that sought permission to launch a dual-share-class product as of December.

“Principal continually reviews its product offerings and aligns them with market demand,” the spokesperson wrote.” Principal selected State Street based on a relationship that spans over a decade, as well as its ability to provide a scalable, integrated servicing platform.”

The mandate includes Principal Funds’ mutual and interval funds, she said. State Street is already custodian for Principal’s ETF lineup.

Read more on what STP’s subject matter expert, David Goldstein had to say here.