Magazine article American Banker

Northern Trust Close to an Outsourcing Foothold in Britain

Magazine article American Banker

Northern Trust Close to an Outsourcing Foothold in Britain

Article excerpt

Northern Trust Corp. is negotiating its first U.K. outsourcing deal.

On Wednesday, Northern Trust said it will provide back- and middle-office services, including record keeping and trade matching, confirmation, and settlement, to Insight Investment Management Ltd., a London unit of HBOS PLC that manages $140.5 billion of assets.

The deal is expected to close in the second quarter. About 90 of Insight Investment's staff members would become employees of Northern Trust, of Chicago.

Northern Trust has been building its European outsourcing business over the past year. "On the international front, our pipeline also continues to be very solid," Steven Fradkin, its chief financial officer, said during its fourth-quarter earnings conference call Jan. 19. Demand for the corporate and institutional services unit's middle-office outsourcing is increasing, he said.

In January 2004 Northern Trust began a five-year strategic plan to strengthen its global fund services business. Last summer it opened an office in Luxembourg. In November it signed a $480 million deal to buy the financial services group of ING Group NV's Baring Asset Management. That deal, expected to close by next quarter, would expand Northern Trust's European mutual fund and hedge fund administration business, as well as its middle-office outsourcing offerings.

Penelope Biggs, the head of Northern Trust's European, Middle East, and African corporate and institutional services, said in an interview Wednesday that the Insight Investments deal would help Northern Trust execute its five-year plan, because it was looking for a "flagship" customer in the United Kingdom. …

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