Northern Trust Sees Growing Trend Toward Investment Program Outsourcing

CHICAGO, May 5 /PRNewswire-FirstCall/ -- Complex investment challenges and a rising compliance burden are accelerating the trend toward investment program outsourcing by pension plans and non-profit organizations, according to Northern Trust, which has funded multiple client outsourcing mandates during the past 12 months.

"The fiduciary challenge facing plan sponsors is greater than ever, as they cope with historic market volatility and the implementation of new accounting rules and pension regulations," said Steven Miller, practice leader for Investment Program Solutions at Northern Trust Global Advisors (NTGA), the multi-manager arm of Northern Trust Corp. "Pensions and other institutional clients are showing more interest in handing over the reins to a specialist with the global resources and expertise needed to design, implement and monitor an investment program in an effort to reach their organization's goals in difficult financial markets."

NTGA's Investment Program Solutions has 60 clients as of March 31, 2010. Three factors are driving interest from plan sponsors:

• Market risk – structural changes in the movements of global markets dramatically influence where and how returns are generated, resulting in a wider array of investment options and specialist asset managers in the program;
• Investment risk – institutional investors have difficulty monitoring manager performance and tracking risk in complex, sophisticated programs, especially in alternative investments;
• Fiduciary risk – market volatility, investment program complexity and tight resources for oversight raise the potential for a plan to stray from its policy and its mission to invest for the best interests of the beneficiaries.

Northern Trust's comprehensive solution provides clients with access to global investment expertise through NTGA's roster of external managers, across asset classes, for a custom manager-of-managers portfolio. The multi-manager solution includes asset allocation strategy, careful measurement and balance of portfolio risks, including asset-liability monitoring, and performance measurement and attribution.

"Clients are looking for ways to bridge the gap between increasing complexity and decreasing resources," said Jennifer Tretheway, managing director, business development and client relations for NTGA. "Trustees and executives are finding that outsourcing can be the most efficient route to a strategy that aligns assets with liabilities and generates reliable returns with an appropriate level of risk. Our recent experience shows that clients are realizing the benefits to be gained from a relationship with Northern Trust."

NTGA is a leading provider of multi-manager investment solutions, with $53.8 billion under advisement for institutional and personal clients. Having investments with more than 200 external managers worldwide, NTGA provides solutions ranging from retail mutual funds and alternative asset classes to total investment program management for institutions and affluent individuals. Northern Trust helps clients manage change, including implementation of the federal Pension Protection Act of 2006 and new accounting requirements for defined benefit plans, as well as demands for increased due diligence and transparency from foundations and endowments.

About Northern Trust

Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of investment management, asset and fund administration, banking solutions and fiduciary services for corporations, institutions and affluent individuals worldwide. Northern Trust, a financial holding company based in Chicago, has offices in 18 U.S. states and 16 international locations in North America, Europe, the Middle East and the Asia-Pacific region. As of March 31, 2010, Northern Trust had assets under custody of US$3.7 trillion, and assets under investment management of US$647.3 billion. For 120 years, Northern Trust has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology. For more information, visit www.northerntrust.com.

SOURCE Northern Trust