[ M A R K E T
M
uch has been said of
ambitious FinTech start-
ups developing nimble
and innovative technology to meet
the evolving needs of buy-side
firms and challenge incumbent
providers.
Their agile nature and lack of
burdensome legacy technology
has made them – if not a threat –
at least worthy competitors who
might cause them a restless night
or two somewhere down the line.
In response, custodians and secu-
rities services firms have actively
sought to partner with these firms,
to foster their ideas and eventually
bring them in-house for their own
clients.
Meanwhile, these large organi-
sations will have maintained their
own internal innovation labs,
where technologists are given the
opportunity to develop new ideas
and see them through from con-
cept to launch.
Vary rarely are individuals from
outside of the firm brought in
to specifically set up their own
business within the organisation.
Northern Trust has bucked that
trend.
In January 2016, Pete
Cherecwich, president of corporate
and institutional services at North-
ern Trust, invited Melanie Pickett
in for a meeting. At the time, she
was the chief operating officer at
Emory Investment Management,
the endowment for Emory Univer-
sity, and also a client of Northern
Trust. She had previously spent
over 10 years at Morgan Stanley
as an executive director for global
wealth management.
“At Emory, my main responsi-
bility was to institutionalise the
portfolio and bring the operational
functions up to speed. A big part of
R E V I E W
that was to build a tech stack that
would meet the needs of the invest-
ment team,” Pickett explains.
At the top of her agenda was to
find a technology solution that met
the increasing needs for invest-
ment data that would help fuel the
front-office decision making for
her firm. This search for a viable
solution proved to be more chal-
lenging than anticipated.
“I went out on a hunt for the best
technology provider/custodian to
support this need, and after talking
to many of my peers, found that
there was not a provider in the
marketplace that had a viable port-
folio management solution,” she
“The current data
model for the
back-office does
not meet the same
needs of the
front-office.”
MELANIE PICKETT, NORTHERN TRUST
|
F R O N T- O F F I C E ]
recalls. “I became passionate about
solving this problem and created a
new business that would preserve
the focus of asset owners on the
long-term needs of their investors.”
This passion earned Pickett a
meeting with Cherecwich, who
then proceeded to offer her a job
later on in the year for a newly-cre-
ated business: head of front-office
solutions. The idea would be to use
Northern Trust’s asset servicing
platform and extending its existing
services by offering new capabili-
ties across data aggregation, data
enhancement, and data analytics
for family officers, pension funds,
outsourced chief investment offi-
cers (OCIO), and endowments.
The creation of the new business
reflected the increasing opera-
tional and technology challenges
complex asset allocators are now
facing. Levels of interest surround-
ing in-sourcing trading and asset
management functions have risen
significantly over the last couple
of years among the largest asset
owners. Disappointing and incon-
sistent returns from asset manag-
ers, coupled with the increasing
dominance of low-fee passive
strategies, have all led to asset own-
ers seriously considering bringing
active management in-house.
To support this trend, asset own-
ers require near real-time data on
cash projections, performance and
analytics, and portfolio allocations.
Pickett’s job was to lead a start-up
business within Northern Trust to
meet these demands.
“By offering a software platform,
it complements our middle-office
team, investment data manage-
ment team and our operational
risk management team. The goal
is to be a high-quality extension of
the investment operations of the
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