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Pickett Grows Front Office Solutions at Northern Trust
As seen published in Markets Media, by Shanny Basar
Melanie Pickett, head of Front Office Solutions at Northern Trust, has risen to a senior position in two sectors which are known for a lack of gender diversity – technology and finance.
Pickett joined Northern Trust at the beginning of 2017 to launch a new line of business within asset servicing which provides technology to in-house investment teams for large endowments, foundations, sovereign wealth funds, pensions, insurance and multi-family offices. These in-house investment teams traditionally had to use separate systems for each asset class.
She told Markets Media: “Necessity is the mother of invention. In the past, it was extremely challenging to find a technology platform that met the needs of an investment team monitoring a multi-asset portfolio. There wasn’t a holistic solution for the entire book.”
She holds an executive masters of technology management, a joint degree granted by the Wharton School of Business and the University of Pennsylvania School of Engineering and Applied Sciences.
“While studying at The Wharton School of Business for my MBA/MSE, I realized that the most important conversations in finance would sit at the intersection of business, technology and operations,” added Pickett.
Before joining Northern Trust, she had been chief operating officer of Emory Investment Management, which is amongst the largest 20 US endowment investment programs.
Pete Cherecwich, now president of Northern Trust Asset Servicing, said in a statement when she joined: “Having spent her career designing and executing large-scale change within financial services organizations, Melanie is a tremendous addition to our team. The needs of global asset owners and allocators have changed dramatically over the last decade and continue to rapidly evolve.”
The new business brings together Northern Trust’s existing platform together with new capabilities across data aggregation, enhancement and analytics.
“Northern Trust executives have historically had a more centralized focus on redesigning products to ensure success,” added Pickett. “When I joined, we set up a specialized, cross-functional business and technology team to be able to get to market quickly.”
The team spent the first year validating the needs of clients and the second year building and launching a customizable platform.
Pickett said in a blog last year: “In our research, every client said they spent more time managing the data than actually analyzing it, and that the relationship between the amount of time they spent collecting, aggregating, and cleansing data was inverse to the amount of time they wanted to be spending on those tasks.”
Pickett explained that it is easy to monitor public companies but Northern Trust also enables risk management of clients’ exposure to private companies.
The new platform uses Northern Trust data and has additional capabilities for clients to define a proxy and flexibly mark-to-market both their public and private exposures, which is important during times of high volatility – such as experienced during the last few weeks due to the coronavirus pandemic.
“In a crisis, it is especially important to also understand any potential liquidity challenges,” she added.
Front Office Solutions has already onboarded clients with approximately $150bn (€136bn) in assets under management, and is agnostic to whether they use Northern Trust for custody. Early next year there is another round of interest which will more than double the assets under management.
This growth is reflected in the size of the Front Office Solutions team.
“At the end of 2018, there were 21 people on the team, which then grew to 53 in 2019, added Pickett. “We currently have more than 70.”
In September last year Front Office Solutions product suite expanded to include a suite of risk management capabilities which incorporate detailed operational due diligence assessments.
Pickett said in a statement at the time: “Complex asset owners have focused their efforts around operational risk management in the decade since the global financial crisis. With our enhanced due diligence capabilities and the strong leadership of Vin Molino, the launch of operational risk management solutions marks a new chapter in Northern Trust’s strategy to support the evolving needs of asset owners across the globe, going beyond traditional asset servicing offerings.”
There are also plan to integrate Front Office Solutions with Omnium, Northern Trust’s middle- and back-office technology platform for alternative fund managers, for a limited number of global investors that have both externally managed portfolios and internal trading.
“That combination is a powerful opportunity for us and would be transformational for the market,” said Pickett.
Prior to Emory Investment Management, Pickett spent more than a decade managing operations and technology strategy within global wealth management at Morgan Stanley. She continued that working at Morgan Stanley for 11 years defined expectations for her career and laid the foundation for the culture she wants to work in.
“The lack of diversity in financial services was especially eye-opening when I was trying to raise capital from venture capital and private equity,” she added. “In 2019, only 2.8% of venture capital funds went to female founders.”
Pickett said she has been successful, in part, because she has had many supporters who encouraged her to be authentic.
“In your career, it can be easy to be pulled in several different directions – my advice would be to follow your interests and instincts, and stay true to yourself,” she explained.
Pickett continued that being authentic requires having a connection to the work you do and Northern Trust Front Office Solutions supports endowments, foundations and other philanthropic organizations who have highly important missions.
“These types of clients want to work with teams who match their diversity“ she added. “I meet with Human Resources weekly so that we can make important decisions on how to focus more on diversity in our recruiting strategy.”
However she added that intentions and actions are two very different things – and only actions will ever actually lead to greater diversity.
“The benchmark for me is, ‘would I encourage my seven-year-old daughter to follow in my footsteps…in this industry?’” she added. “She’s the reason I want to make this an industry of choice for women and people of color.”
Pickett said she knows the industry will have succeeded in increasing diversity when she can answer that question with a definitive “yes”, and she is optimistic.
“We are making progress on many fronts,” she added. “I am lucky to work for an organization that both supports and encourages diversity.”