Aug 29 (Reuters) - Custodian bank State Street

said on Friday it would expand its accounting, administration

and custody services for asset manager Columbia Threadneedle

Investments' funds, covering about $431 billion of assets.

As part of the deal, more than 100 Columbia Threadneedle

employees, who handle accounting and administration for U.S.

pooled funds, are expected to move to similar roles at State

Street, the bank said.

The expanded mandate will help State Street solidify its

position as one of the world's biggest custodians and

back-office service providers.

It also shows how major asset managers are increasingly

outsourcing operational work to specialist firms such as State

Street to cut costs and focus on investment performance.

Columbia Threadneedle is an arm of Ameriprise Financial ( AMP )

. Its partnership with State Street covers pooled funds

in the U.S. and Europe.