Northern Trust Asset Management, the Chicago-headquartered custody bank’s $1 trillion funds business, plans to hire in London this year as it looks to build its investment team in Canary Wharf, a financial hub.
John McCareins, who became international head of Northern Trust’s asset management business in June last year, said it would recruit “half a dozen or so”, bolstering the number of investment professionals in London to more than 20. McCareins said Northern Trust was prioritising growth of its fixed income business globally, given increased investor appetite for the asset class.
He said: “Interest rates have made fixed income much more relevant than it was 12 or 24 months ago”. The asset manager has 66 people currently across its fixed income team worldwide, but has shifted focus to building its expertise in the asset class across Europe.
“We are in the market, actively recruiting for trading and portfolio management as we want to bring product manufacturing closer to clients,” said McCareins. “Building out a broader team of portfolio managers and traders (in the UK) gives us better access to local market insights that can help to inform our efforts with teams in the US. We continue to work and integrate with the US, but it is less of a fly-in, fly-out model and more about having a localised approach.” Away from London, Northern Trust Asset Management hired Cuido Baltussen as head of quant international in November to be based in Amsterdam office. McCareins said two additional hires will join the unit led by Baltussen, who previously oversaw Robeco’s quant fixed income team which was announced in January.
Increasing headcount comes as Northern Trust AM earmarks growth across its non-US business. “The mandate for us in our international business is to double revenues over the next five years,” said McCareins.
Asset managers are gearing up for a potential flood of investor money into fixed income products, as investors look to take advantage of attractive bond yields. BlackRock president Rob Kapito told analysts in 2023 that “trillions” of dollars parked on the sidelines and in money market funds will “flood the fixed income market” when investors feel interest rates have peaked.
Asset managers have already gathered billions into their fixed income products, attracting 147 billion euros of new money across Europe between January and November 2023, according to Morningstar. This compared with 12.7 billion euros garnered by equity funds and outflows across most mainstream asset classes during the same period.
As well as expanding its London-based fixed income team, Northern Trust AM will be looking to recruit more staff to work with some of its wealthiest clients in Europe. Northern Trust’s global family and private investment office business has more than five hundred clients, with the average size of assets standing at $1 billion dollars.
“That type of client requires not just a certain level of sophistication of investment and asset servicing capabilities, but an advice model that is different to what you would see working with traditional asset owners,” said McCareins.
He added: “From a growth perspective, it’s an area during 2024 where we will be going to market to hire investment practitioners that have experience working with families of significance.” (The writer is our foreign correspondent based in the UK)
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