Investment Outsourcing Grows At Northern Trust

As institutional investors confront the heightened challenges of increased complexity and constrained resources in their investment programs, Northern Trust Asset Management has experienced rapid growth in outsourced chief investment officer (OCIO) services, adding $13 billion in assets from 19 new clients over the past year.

New clients for OCIO services provided by the Multi-Manager Solutions group at Northern Trust Asset Management include corporate defined benefit pensions, a multi-employer pension plan, family offices and not-for-profit institutions in the United States, Canada and Europe. The new clients, added in the 12 months ending March 31, 2014, bring Multi-Manager Solutions to more than $90 billion in assets i.

“We see growing interest in outsourced CIO services from corporations, foundations, endowments, global family offices and health care organizations,” said Joseph W. McInerney, head of Multi-Manager Solutions at Northern Trust Asset Management. “From mid-sized plans to those over $1 billion in assets, institutions are looking for an outsourcing partner with deep expertise in the design and implementation of sophisticated investment programs and a fiduciary approach to the oversight of those programs.”

Northern Trust Asset Management is a leading provider of investment outsourcing, leveraging a multi-manager practice founded 35 years ago to support institutional demand for a trusted advisor that avoids conflicts of interest by using best-in-class external managers for actively managed strategies. Multi-Manager Solutions invests with more than 300 external managers worldwide, including specialists across the spectrum of traditional and alternative asset classes and strategies. Using this platform, Northern Trust Asset Management can develop strategies to meet varied investment objectives, such as a foundation seeking higher returns over an extended time horizon, or a pension balancing return-seeking elements with specialized strategies intended to hedge changes in pension liabilities.

“A key driver of growth in outsourcing has been corporate pension plans, which seek to secure the gains they have made in funded status through ‘de-risking’ strategies, shifting from equities to fixed income investments,” said John McCareins, Practice Lead and Senior Client Investment Officer at Northern Trust Asset Management.

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