Northern Trust Corp. in Chicago is poised to tap more third parties as sellers of its managed accounts, according to the executive recently hired to take charge of the products, and it will add fund portfolios where demand is strong.
“To this point we have primarily focused on selling [managed accounts] within the Northern Trust system,” said Peter Jacobs, the senior product manager for mutual funds and managed accounts. “We are on the brink of [additional] third-party separately managed account relationships with wire houses and other advisory firms.”
Northern Trust sells the products to its own customers and through half a dozen outside broker-dealers, Mr. Jacobs said. It wants to add distributors and sell more through existing ones, he added.
The arrangements are part of an effort being headed by Mr. Jacobs to boost the separate account and mutual fund assets managed by Northern Trust. The company is also gradually adding mutual funds and is bolstering the training of its wholesaling team, he said.
Northern Trust manages $48 billion in its retail and institutional mutual funds, of which there are 53. That asset total is up from $46 billion two years ago. Its managed account business has about $2 billion of assets under management.
“We are committed to growing and are looking to do that through internal and external channels,” Mr. Jacobs said, adding that specific sales goals have not yet been set.
Northern Trust announced Mr. Jacobs’ hiring from Deutsche Asset Management late last month. He is in charge of setting and executing investment product strategy and communicating the strategy to financial advisers and high-net-worth clients.
He reports to Eric Schweitzer, a senior vice president and director of marketing for Northern Trust Global Investments, the banking company’s asset management arm.
The company has added two mutual funds this year, an international index portfolio with $450 million under management and a mid-cap portfolio with $160 million.
Mr. Jacobs said additional new products will be added “where appropriate.” “Index funds have been popular, and that is something we continue to look at. There seems be demand for it.”
There also seems to be a demand for actively managed, income-oriented products, he said. New funds will not be limited to conservative strategies, though portfolios like midsize or smaller sector funds would probably not fit Northern Trust’s approach, he said.
“We don’t bring in many new products here; it will be a slow, gradual process,” Mr. Jacobs added.
He will also focus on cross-selling, for instance, persuading third-party distributors that sell Northern Trust managed accounts to include mutual funds in their wrap account offerings.
Much of his mission will consist of training the wholesale staff and others about the mutual fund and managed account products, Mr. Jacobs said. This would be especially logical if the same manager is running both the separate account and the mutual fund, he added.
Mr. Jacobs worked for Deutsche Asset Management and its predecessor, Scudder Kemper Investments, where he was Scudder Mutual Funds’ director of product management. He is in charge of a relatively small portion of Northern Trust’s investment business, which has $589 billion of assets under management, in everything from large institutional separate accounts to specialized “quant” investments to a “manager of managers” capability.
Financial Research Corp., a Boston research company, ranked the Northern Funds family as the sixth-largest run by a bank in the first quarter. It was also rated the fastest-growing bank complex in March — thanks, Mr. Jacobs said, to the two new funds and an international fund.
