Northern Trust Seeks Distribution Partners in Western Europe

Article excerpt

After two years of a go-it-alone strategy in Western Europe, Northern Trust Global Investments has switched to teaming up.

Building and buying have brought the overseas asset management unit of Chicago's Northern Trust Corp. only $4 billion to $5 billion to manage, said Stephen B. Timbers, its president, in an interview. That is a tiny fraction of the $400 billion it holds under custody in all its markets. (The parent company's total is over $1.7 trillion.)

So now the unit has formed a distribution joint venture -- with Helaba Trust, the trust and asset management unit of the state-owned Landesbank Hessen-Thueringen in Frankfurt -- and hopes to have four or five such relationships in Western Europe by the end of the year.

"Asset management is a local business," Mr. Timbers said. "To sell our products we need relationships with local institutions whose clients need our products."

Helaba NorthernTrust GmbH -- 75% owned by Northern Trust and 25% by the German bank -- began operations last week. It offers institutional investment management products and services, such as retirement plans, to German customers.

Its first product is the Helaba Northern Trust Corporate Bond Fund, which went on sale on the company's first day. Other fixed-income and equity products are planned.

Northern Trust's buy-and-build push in Western Europe started in the fourth quarter of 1999. That is when Guy Williams was hired from Paribas Asset Management of Paris to help expand the international fixed-income product line.

Further steps followed fast:

In May 2000, Northern Trust Global bought Ulster Bank Investment Services of Dublin for $12.8 million.

Six weeks later the U.S. company launched Northern Trust Global Investments Europe Ltd., focused on selling investment products in the Netherlands, Scandinavia, and Switzerland. …