Biggs ‘Conducts’ Northern Trust Strategy
Penelope Biggs, executive vice president and chief strategy officer, Northern Trust Corporate & Institutional Services, is a member of the advisory board of the Royal Philharmonic Orchestra. Watching conductors leading a large group of musicians may provide inspiration for her new role as chief strategy officer, giving Biggs more responsibilities over a division with approximately 6,000 staff in 26 worldwide locations. Northern Trust has $9.3 trillion of assets under administration and $1 trillion of assets under management.
Her expanded role was amongst five management changes in Europe in March following the appointment of Peter Cherecwich as president of Corporate & Institutional Services in the previous month. The division manages, administers and services investment portfolios for global asset owners and managers. Biggs has a wide remit ranging from strategic planning, communication and implementation of global strategy for the institutional business to client engagement, global marketing, market entry and strategic acquisitions.
Biggs was involved in the final stages of Northern Trust’s acquisition of UBS Asset Management’s fund administration servicing units in Luxembourg and Switzerland, which has just closed after being announced in February.
She told Markets Media: “The acquisition gives us more scale, and brings us our first office in Switzerland, building on our 30 years of experience servicing Swiss clients. It also validates our Brexit strategy by driving growth across continental Europe.”
The UK voted to leave the European Union last year and it is still unclear how UK financial services firms will access the EU, and vice versa, after Brexit. Northern Trust said the deal positions the firm as a leading administrator by assets in Switzerland and a top 10 asset servicing provider in Luxembourg, as well as adding 200 new employees. The US financial services group was founded in 1889 and first opened an office in Luxembourg in 2004.
European financial markets will be changed at the beginning of next year when the MiFID II regulations come into force. Requirements under MiFID II include payments for research being separated from trading commissions, after being historically bundled together, stronger best execution requirements and increased trade reporting.
Last year Northern Trust completed the acquisition of Aviate Global after searching for an institutional equity brokerage firm for four years.
Biggs added: “The acquisition of Aviate Global gave us an institutional equity brokerage capability outside the US which benefits our transition management offering for clients and positions us well to support clients with their MiFID II reporting requirements.”
The deal also added AviateLive, a research product designed to drive actionable investment ideas. The brokerage has been integrated into Northern Trust Capital Markets.
In addition to expanding its brokerage capabilities, in 2016 Northern Trust partnered with BEx, which develops automated foreign exchange trading solutions, to help its clients execute electronic FX trades more efficiently and reduce their transaction costs.
“We formed an exclusive partnership with an FX software provider to deliver innovative foreign exchange solutions to support our clients with customised trade execution, access to actively managed liquidity and ultimately price and fee transparency,” added Biggs. “Our partnership with BEx has brought us new relationships and gained traction quicker than we thought.”
She continued there are further growth opportunities in expanding Northern Trust’s foreign exchange capabilities across the globe.
Technology is playing an increasingly important role in financial services and in 2015 Northern Trust formed 50 South Capital, a boutique alternatives provider, which has invested more than $1bn in fintech start ups.
Northern Trust and IBM have also built a blockchain, or distributed ledger solution, based on the Hyperledger Fabric. In February this year they announced the first commercial deployment of blockchain technology for the private equity market with the administration of a fund domiciled in Guernsey which is managed by Switzerland’s Unigestion.
Biggs said: “We wanted to deploy blockchain in a traditionally complex asset class, like private equity administration. The aim is to now drive it’s use into other parts of the private equity value chain, and then other complex asset classes.”
Emma Bailey, director of the Investment Supervision and Policy Division of the Guernsey Financial Services Commission, said in a statement: “Northern Trust has engaged with us as regulators from the start and we are pleased with the level of openness and interaction.”
Using a blockchain allows the fund to transfer ownership stakes and be managed, serviced and audited throughout the investment lifecycle on a transparent platform offering “one version of the truth” on a real-time basis to approved participants.
“We are focussed on providing transparency and increasing operational efficiency in alternatives through Front Office Solutions, a new part of the business,” added Biggs. “Front Office Solutions is already working on a proof-of-concept with key clients.”
Front Office Solutions within asset servicing is focussed on meeting the operational and technology needs of complex asset allocators across the globe and bring innovation across data aggregation, data enhancement and data analytics.
In February this year Northern Trust announced the hiring of Melanie Pickett as head of Front Office Solutions. Pickett was previously chief operating officer of Emory Investment Management, one of the largest US endowment investment programs. Prior to Emory Investment Management, Pickett spent over a decade managing operations and technology strategy within the Global Wealth Management division of Morgan Stanley.
Biggs also sees growth opportunities in providing direct custody in Saudi Arabia, where half of Northern Trust’s staff are women.
“Across our recruitment initiatives we are pushing to see a more diverse range of candidates for roles,” Biggs added. “Northern Trust has also signed up to the UK Treasury’s Women in Finance Charter.”