"We have the technology to compete," says CEO Kevin Sheehan.  (Globe Photo / Amy Newman)

In the land of giants, a small custodial banking firm resembles David

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he chief executive of Investors Financial, Kevin Sheehan, can't help but feel, just a little, like saying "I told you so" to those who doubted his Boston firm would survive amid the giants of the custodial banking industry.

The company acquired JP Morgan Chase's advisory custody unit and won a major contract from Barclays Global Investors last year, sending its assets under management from about $315 billion to about $800 billion -- during an otherwise difficult year in the financial markets.

"The competition likes to portray us as a niche player, but winning the largest outsourcing contract to date [from Barclays] goes a long way to validate our premise," Sheehan said. "This is a technology business, and we have the technology to compete."

Investors Financial competes against the likes of State Street Corp. and Bank of New York to do the behind-the-scenes number crunching and administrative work for mutual funds, annuities, partnerships, and other organizations that need to manage large quantities of money. Still much smaller than its rivals, Investors Financial has specialized in managing the more complex transactions. Now, though, the company is attempting to leverage its track record into broader relationships with its customers, Sheehan said. Barclays, a client since 1996, fell into that category.

Buoyed by the deals last year, Investors Financial earned $50.2 million, or $1.53 per share, up from $33.6 million, or $1.08 per share, in 2000. Revenues increased to $352.5 million from $220.9 million.

SCOTT BERNARD NELSON