Northern Trust’s fiduciary responsibilities guide our investment management decisions. We seek to add value through an investment process that is driven by your organization’s goals and includes a wide spectrum of investment capabilities that can be tailored to your needs.
Understand and Assess
We work with your investment committee to understand the organization’s long-term objectives and short-term operational needs – assessing spending policy, current asset allocation strategy, liquidity requirements and acceptable risk levels. An investment policy statement is designed around your organization’s financial goals and objectives. This becomes the blueprint that drives the investment strategy and portfolio construction in order to align your investment objectives with your organizational needs.
Research and Evaluate
Our research team of more than 100 investment professionals utilizes qualitative and quantitative techniques to gain a thorough understanding of each manager’s investment philosophies, processes and personnel profile. In addition, we document and review each manager’s compliance, internal control and operational risks. We select and combine managers to provide an optimal blend of “best in class” options based on performance and diversification considerations to achieve the dual objective of superior risk-adjusted portfolio returns and a cost-effective investment program.
Construct and Implement
Based on your organization’s investment policy, we recommend investment solutions designed to achieve the desired risk-adjusted return while maintaining the appropriate level of liquidity. Our solutions capitalize on our skill, expertise and industry leadership positions in active and passive investment strategies. We recommend active solutions when and where potential value-added performance opportunities exist, and passive solutions for more efficient portfolio exposures.
Monitor and Review
A rigorous process is in place to oversee your organization’s investment program and identify potential issues that may support proactive adjustments to strategy. We provide continuous oversight and monitoring of all aspects of the portfolio’s operations so that the investment policy, asset allocation and specific investment strategies employed continue to support your overall investment objectives using quantitative techniques such as Lipper, eVestments Alliance, Morningstar, WealthBench and other sources.
Beyond Traditional Investing: The Endowment Model
Strategic alliances with third-party managers allow Northern Trust to offer our qualified institutional investors with direct access to a unique and exclusive endowment-style investment model. The endowment model, founded on diversification, manager selection and risk management with an emphasis on alternative investments, seeks to deliver superior risk-adjusted returns based on the investment approach pioneered by the largest university endowments. Designed for long-term investments, the endowment strategy can be accessed as a cornerstone in an integrated investment program, ranging across a spectrum of less liquid “perpetual capital” solutions that includes generous allocations to less liquid alternatives and private asset exposures.
James D. Leckinger