Northern Trust Wins New Currency Mandates

Northern Trust says it is experiencing strong demand for its currency management services with a number of significant new mandates over the past 12 months.

It adds the appointments to provide a full suite of currency management services span newly onboarded clients including Blackwall Capital Investment, Kieger and TT International Asset Management, in addition to significantly expanded services for existing clients including AMX (The Asset Management Exchange) and Rockefeller Asset Management.

The bank explains its currency management suite comprises share class hedging, portfolio overlay and ‘look through’ hedging solutions to help asset managers and asset owners manage and mitigate currency volatility for their international investment portfolios. The automated solutions are set to agreed client parameters to deliver active monitoring against target hedge ratios, unrealised P&L views, real-time performance attribution analytics and detailed transparency and oversight dashboards.

Northern Trust recently enhanced its currency management solutions with machine learning models designed to enable greater oversight of thousands of daily data points and help reduce risk throughout the currency management lifecycle in conjunction with its strategic partner Lumint Corporation.

“A combination of rising operational costs, governance pressures and regulatory requirements are encouraging asset managers and asset owners to delegate their FX currency hedging to a specialist third-party who can efficiently manage FX risk, enabling them to focus on their core investment process,” says John Turney, global head of foreign exchange at Northern Trust. “This trend has been further accelerated by the COVID-19 pandemic, which has heightened the need to respond quickly to market events in order to manage and mitigate currency volatility in global investment portfolios. Northern Trust’s bespoke automated end-to-end solution eases the administration burden, strengthens oversight and supports distribution strategies throughout the full currency management lifecycle.”

Oliver Jaegemann, CEO of AMX, adds “Northern Trust has been our partner since the launch of our hedged share classes and has offered a comprehensive service to us across a number of funds. The integration with Northern Trust’s fund administration solutions, and the rest of its operations, leads to a robust operating model and high-quality service to both our managers and clients. As the AMX platform continues to grow, in terms of assets, managers and funds, our clients will benefit even more from our partnership with Northern Trust.”

Meanwhile, Chip Montgomery, head of business strategy  and corporate development,  Rockefeller Asset Management, says, “Northern Trust drew on its deep understanding of FX currency management to design a sophisticated solution, directly addressing the objectives and challenges of a significant underlying investor in Rockefeller’s Global ESG Equity UCITS Fund. By delegating currency share class hedging activities to Northern Trust, we have delivered currency hedging solutions to the growing number of sustainability focused investors on our UCITS platform; all while retaining oversight through Northern Trust’s advanced performance analytics.”