Northern Trust Asset Management plans to reduce the number of managers available on its $124 billion platform used by its institutional and private wealth businesses.
The multi-manager platform is overseen by Chris Vella, chief investment officer of Northern Trust Multi Manager Solutions, and his various teams.
It currently houses 241 strategies in total, made up of mutual funds, collective investment trusts, separately managed accounts, private vehicles and multi-manager funds.
‘We’ve been looking at concentrating our roster of managers and really focusing on the premium managers, or the highest conviction managers, and making sure that we have the right allocations to the right managers,’ Vella said.
‘We’re in a position where we already have a concentrated list of managers and I would like to see that become even more concentrated.’
He added that where the platform has a few different strategies in a particular asset class or category, he would look to eliminate some options and move assets to ones where he has the highest conviction.
Since the summer of 2017 around 15 strategies have come off the platform, with five of these being removed since November last year. These have been in categories such as global Reits, emerging market debt and small cap equity.
Vella said most of the strategies removed last year had failed to garner $25 million or more in assets.
‘A lot of that focus has been around managers that have not accumulated that much in assets, so there haven’t been any managers with very large exposures that we’ve decided to consolidate,’ he said.
He added that the firm was adding new managers in which it had higher conviction in these categories, but usually one new strategy for every two or more being removed.
‘We made a change in the global Reit arena where we identified a manager that was a better complement than what was in the fund… [it was] a little more concentrated and it balanced out the other concentrated strategy that was in the fund.’
Vella did not give the names of the global Reit managers, but in January Citywire reported that Northern Trust had replaced Delaware Investments Fund Advisers with MFS as a subadvisor to the $152.3 million Northern Multi-Manager Global Real Estate fund, according to a Securities and Exchange Commission filing.
The fund’s other subadvisor is Brookfield Investment Management.
Vella (pictured above) said his team would continue to cover all the managers on its platform in-house. He has five teams that report to him: global equity manager research, global fixed income manager research, specialized strategies manager research, multi-manager investment products and the middle office team.
Vella said his team was also looking to add managers in certain areas, highlighting current searches in emerging market debt, real assets and small caps.
He cited finding uncorrelated strategies as the firm’s main focus at the moment.
Recent additions to the platform include a global equity strategy from Australian growth managers Magellan Financial Group as well the Clearbridge International Growth ESG strategy, he added.
To read Citywire's profile of Vella, click here.
Separately, Northern Trust Asset Management has hired former Harbor Capital Advisors gatekeeper Peter Hamet to work as part of the firm’s family office team within its investment advisory unit.
At Harbor, Hamet was responsible for product development and manager due diligence across traditional and alternative asset classes, according to his LinkedIn profile.
He has joined Northern Trust as a senior client investment officer within the investment advisory team serving global family offices.
In Hamet’s new role he will put together portfolios for ultra-high-net-worth clients. He will work closely with Vella’s team, which holds overall responsibility for manager selection and due diligence of strategies in these portfolios.
‘He’s got a nice mixture of client background but also a very strong investment and research background,’ said Vella.
Hamet is now based in Chicago and reports directly to Mark Maly, practice lead for the global family office team at Northern Trust.