Northern Trust seeks Asian investment mandates

It is expanding its Hong Kong office to market multi-manager and other institutional investment-related services.

Northern Trust Global Investments is establishing a capability in its Hong Kong office to market services such as multi-manager products, transition management and securities lending to institutional investors.

Its affiliate in custody already has a longstanding presence in Hong Kong and Singapore. And the firm has had a Tokyo office for several years run by Kunihiko Nakao. It already runs custody operations in various regional centres.

Thomas Benzmiller, managing director, is transferring from the firm's Chicago headquarters to run the Asian business.

The main focus will be selling its multi-manager capability. Asian institutions are just beginning to invest in manager-of-manager products, with US rival SEI Investments scooping the first two institutional mandates out of Hong Kong and Russell Investment Group forging a presence at the retail level via local banks. HSBC Asset Management is also beginning to market a multi-manager product as well as funds of funds.

"We now rank as the ninth largest investment manager in the world," says Benzmiller. "Asia is the next growth market." He reports locally to Lawrence Au, Asia Pacific general manager, and to Barry Sagraves, CEO of Northern Trust Global Investments (Europe) in London.

The firm manages E17.5 billion of multi-manager assets.

"We may not be the largest multi-manager, but we're big enough to have scale and we're also small enough to provide a customized service," Benzmiller says. "You don't have to be the biggest to be the best. We go after the biggest mandates, but we can also compete for mandates that aren't attractive to other players."

He says most of his work will involve educating institutions about what multi-manager products are. "We'll talk to anyone who is interested in learning about multi-management. The idea is somewhat new in Asia but it is gaining momentum. It will need more education. There could be an opportunity for a multi-manager to take responsibility for an entire program. Or, if say a Hong Kong client is familiar with its own market, it could use us to build out international mandates.

"We acquired Deutsche Bank's quant business and we're now the third-largest quant manager in the world. We provide pure quant index and enhanced index capabilities, as well as our own active funds management and other investment and custody-related operations such as securities lending and transition management."

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