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NUMBER 299 Northern Trust’s EMEA head Teresa Parker sets her sights on growth COVER STORY: TERESA PARKER, NORTHERN TRUST

CUSTODY Northern Trust’s Parker eyes European growth

Some fifty years after Northern Trust set-up its first European office in London, Teresa Parker, the chief executive of the group for EMEA, said the firm is still looking to grow in key markets such as the Nordics and the Netherlands. By Luke Jeffs

Autumn Special 2019 12 www.globalinvestorgroup.com CUSTODY - -

Parker concluded: “We willParker concluded: “We see both not only the relationship management somebut technical folks working on investment risk and analytics, perfor mance measurement and compliance.” the Middle East and continental Eu rope grow further think time. over We a greatthere’s opportunity there for theproduct set.biggest The testimony is clients telling us we are different www.globalinvestorgroup.com - TERESA PARKER, NORTHERN TRUST NORTHERN PARKER, TERESA

13 We made the decision after the vote that vote the decision after made the We of that the headquarters move had to we COVER STORY: COVER “It would’ve been maybe efficient put to it in Dublin, but it would “Our EU bank was headquartered in London that allowed us, : “London remains our regional headquarters with our EU bank bank EU our with headquarters regional our remains “London : “The big thing that focus we on with Brexit is the macro and economic “So made we the decision after the that vote had we move the to “Going back our to areas of focus, continental Europe is a place that we She added: “We have a Saudi office locations with the right structures.” strategy and our plan put to resources there, increased we the executive management of amount significant a added and Luxembourg in presence resource, including a CEO of that bank in Luxembourg, a CFO and a new compliance officer.” What is the latest? Parker significant a developed have we and Luxembourg in headquartered Ireland. in and Luxembourg both in presence executive impact, so that is the geopolitical risk that we’re paying attention to. We have also been working with our clients ensure to that they’re structured and ready for the Brexit situation, and their products are in the right headquarters of that EU bank. Instead of creating a new Luxembourg Luxembourg new a creating of Instead bank. EU that of headquarters based bank, were we able move the to bank’s entity from London to Luxembourg.” Why Luxembourg Dublin? over Parker: not have been strengthening us. In Ireland are we the third largest I (and think soon be to second largest) custodian, but what said we is this is an opportunity think to strategically. want put We to resources in continental Europe with the idea that want we us grow to it. If you want you grow, to have to invest. think should we do more on. If go we back that to continental European Northern Trust and Brexit Northern Trust What challenge did Brexit pose for Northern Trust? Parker: through the passporting system, be to able serve to EU clients across the continent. When Brexit came up and the indecision was there, couldn’t we wait find to out what was going happen. to been working with servic us to move ing closer to them in the region. that we’ve had open for which are we growing considerably. five years, We’re doing well in spent time of a lot there, the but Kuwait biggest as we change services moved is we’ve there from the US and London and that’s London London or the US, they have actively EU bank. Instead of creating a new Luxembourg Luxembourg a new of creating EU bank. Instead the bank’s move to able were we based bank, Luxembourg. to London entity from ------

n her thirdyear as the London- basedNorthernhead of Trust’s various interests in Europe, Middle Parker said: “Investors in the Middle “We’re growing nicely“We’re in the Nor Parker leads 3,500 staffacross 11 lo Despite the Brexit turmoil, Parker “We’ve done incrediblywell in the UK The UBS deal in late 2017 significant Reflecting on her time in chargeof She wastedlittle time in stamping Parker is a Northern Trust lifer who Special 2019 Autumn East become have much more sophis ticated. Whereas they used to prefer that they were serviced from either cations including offices in Abu Dha bi and Saudi Arabia, which are also yielding growth. resourcesin continental Europe and arewe focusing on growth there.” tor by assets,” by tor Parker said. dics and the Netherlands. the have We The The acquisition of UBS fund ourdoubled size in Luxembourg and services Switzerlanda added presence, where arewe the now largest fund administra andIreland and want to maintain we our also position focused there. We’ve resources of a lot on continental Europe. andher team are working hardin some the of key European markets. March 2019 the location of Northern EU Trust’s bank, a response to the un certainty around Brexit box). (see ly increasedly Northern pres Trust’s ence in Luxembourg which became in the franchise has really done well and grownnicely throughout theorgani sation, and that has been on top an of situation.” geopolitical interesting fall-out from decision the2016 to UK’s quit the European Union, Parker told Global Investor: “During that time, units in Luxembourg and Switzerland. EMEA, which included most the of her mark on NorthernEuro Trust’s pean business completing by in Octo ber 2017 the acquisition of UBS Asset Management’sfund administration London London in 1994 and assumed the top European job in the middle 2017. of the impact new of technology. started at the firm in 1982, moved to East and Africa, Parker is also dealing with macro-trends such asthe need for greater diversity in the and workplace I CUSTODY the organisation, clientsandshareholders? and how you thinkaboutwhat isvalue addedto do it,how you collaborate, how you cooperate what you’re ableto dothat matters buthow you Autumn Special2019 COVER STORY: (in millions) Source: NorthernTrust Northern Trust Assets UnderCustody by Asset Class (in millions) Source: NorthernTrust Northern Trust Assets underCustody andFundAdministration –Quarterly (in millions) Source: NorthernTrust Northern Trust Assets underCustody andFundAdministration –Annually Cash andOther $1,327.4 (15.5%) $3,112.4 (36.5%) 10 10 Fixed Income: 12 12 0 0 4 4 6 6 8 8 2 2 $163.4 (2%) Collateral: Assets: to itinthehiringprocess. Soit’s notjust Culture isimportantandwe pay attention $10,785.7 Q1 2018 $7,797 2015 TERESA PARKER, NORTHERNTRUST Q2 2018 $10,712.5 $8,541.3 2016 $10,829.3 Q3 2018 $8,518.8 Total

$10,125.3 Q4 2018 $10,722.6 2017

$10,927.4 Q1 2019 14

$3,915.6 (46%) Equities: $10,125.3 Q2 2019 $11,322 2018

www.globalinvestorgroup.com ing of what other clients like, so we are we so are like, clients of what other ing understand our from experience our do? to impart We also can trying they are What accomplish? to trying client the what is with that’s starting So is. proposition that different how realise you markets, new into get to you start when But things. do you how is this think Ijust so for along time, here been I’ve difference. a makes that thing the markets. Gulf and European more into interests their have expanded team her and she as Parker to evident become has this and rivals, its than clients with more ing group.” focused aclient- we are group, rather cused what we do. We’re aproduct-fo not of centre at the we put them because jor conduct failings that have occurred have occurred that failings conduct jor ma of the cause root a key as accepted iswidely services “Culture in financial regulators. and figures essays industry academics, 28 from on based services fi nancial in culture transforming on paper Trust. Northern at culture inclusive and a productive Financial Britain’s help to promote Conduct Authority including lators regu European with working time shareholders?” and clients organisation, added the to value what is about how youand think howyou you collaborate, cooperate but how you do it, matters how do that it’s So what you’re just not cess. able to pro hiring the it to in we pay attention book. Trust’s of Northern size the times three than more is which trillion, $30 than more of administration under have assets of whom some peers, atlarger its those to different is Trust Northern at ture up.” that all backs that model ing operat the and ogy, infrastructure the technol the service, the products, the conversation.” the to that bringing She said: “The clients’ testimony is is testimony clients’ “The said: She do on itself prides Trust Northern The watchdog wrote at the time: time: at the The watchdog wrote a 2018 early in published FCA The alotof spent has she said Parker and important is “Culture said: She cul the believes chief The European have to have you “But added: Parker

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www.globalinvestorgroup.com TERESA PARKER, NORTHERN TRUST NORTHERN PARKER, TERESA

15 Culture may not be easily measurable but it not be easily measurable may Culture So firms can and should take is manageable. COVER STORY: COVER “Our track record has been strong over the last decade because we “ESG is an opportunity. do help We asset managers with their ESG “Other places are picking it up but the Nordics was the first place “Our own asset management business has a very strong track record “It is part of the DNA of what do. we It’s an opportunity for us both on the complement and support their business strategy. and support their business complement responsibility for ensuring their culture is healthy their culture ensuring for responsibility can which and customers, both their employees for business.” asset management side and then for analytical services in asset servicing to help our clients in terms of how they’re thinking about it.” What are Northern Trust’s ESG credentials? Parker: were onto this quite early on. Now I think we’re helped because of some of our northern European clients have been very much onto ESG. They were leaders on this. I remember hearing about it. I mean, they didn’t call it ESG then but sustainable investing, and that was maybe 15, 20 years’ ago. and a 25 year heritage of offering sustainable investment products. Their products have done very well in this space, for clients from across our Northern Trust and Environmental, and Environmental, Northern Trust Social and Governance What is the Northern Trust’s position on ESG? Parker: considerations. Our analytical services on performance, risk or compliance, usewe those help to asset managers define ESG. Are they within their parameters? What’s the performance of those assets? ------Northern Trust has signed to up Northern policy Trust’s on diversity, Parker added: “The evidenceParker added: shows “So people might question: What She said: “There are lots studof For For Parker, the adoption of a more Parker said of the FCA: “Part of Jonathan Davidson, FCA executive Special 2019 Autumn the UK’s Women in Finance charter, backed by HM Treasury and over 330 groupthe people of toadd able value they can bring to the organisation and that they can bring their full selves to the organisation”. sometimes, actually get better results.” diverseParker said, is to encourage “a diverse groups,even though they bemay a little more uncomfortable bit diverse actually you group, to ask have questions a little bit more. You can’t just take shortcuts. does It call be out haviours and norms a little more.” bit does that that? say did you mean?Why the Whensame, everyone’s they all get into shorthand a have when but you and rules explicitly that ex don’t you plain. ies that the show more diverse your organisation, the just can’t more you assume a set operating of behaviours faced by the financial services indus try:the promotion diversity of in the workplace. inclusive culture that encourages staff to question established closely aligned practices to another challenge is able truthsable an opportunity so here’s or an issue.here’s Making sure create you that space is important.” what theywhat want to make sure is that people are to bring able uncomfort up ing their culture is healthy both for their and employees customers, which can and complement support their business strategy.” “Culture not be may easily measurable but it is manageable. So firms can and shouldtake responsibility ensur for director Supervision of - Retail and Authorisations, said in March 2018: priority for the FCA. We expect firms to foster cultures which support the spirit regulation of in preventing harm to consumers and markets.” within theindustry inrecent history. Given its impact, firms’ culture is a CUSTODY 2,000 1,000 to have at least oneseniorwoman onit. across EMEAandevery interviewing panelneeds women orethnicminorities.We’ve donethis Autumn Special2019 COVER STORY: (in millions) Source: NorthernTrust Northern Trust Q22019 Fees by Business Line (in millions) Source: NorthernTrust Northern Trust Custody andFundAdministration Fees –Quarterly (in millions) Source: NorthernTrust Northern Trust Custody andFundAdministration Fees –Annually 400 300 500 200 100 $110.8m (20%) Management: $21.8m (4%) 0 0 $31.7m (6%) Investment Securities Lending Other: needs to have adiverse slate ofeither Every seniorvice president and above $1,069.9 Q1 2018 Q1 2018 $373.9 TERESA PARKER, NORTHERNTRUST Q2 2018 $376.7 Q2 2018 $1,150.8 Q3 2018 $374.7 $549.4 Total Q3 2018 $1,182.2

Q4 2018 $375.8

Q4 2018 $1,342.1 Q1 2019 $375.1 16

$385.1 (70%) Administration & Fund Custody Q1 2019 $1,501.1 Q2 2019

$385.1

www.globalinvestorgroup.com terviewing panel needs to have at least have to at least needs panel terviewing in every and EMEA across done this We’ve minorities. women or ethnic of slate either have to a diverse needs above and president vice “Every senior hires. for slate senior adiverse forcing difference?” that make to do to change do to we need What ourselves: ask to but we continue finances and organisations other of lot a than we’re and well better pretty ing senior in 2020. by positons women 35% having of get 2015. in sector services financial the in mittees com executive of 14% just made-up women found that areview lowing fol 2016 in launched firms, signatory thing of that, that didn’t bother me at me at didn’t bother that of that, thing any I didn’t my think career, started for me.” tough be it so will environment, a male-oriented I’m if and, it’swork awoman, hard very “You said: They you”? replied: wouldn’t “Why she And services”? financial “Why would I question: want to go into the her asked they and through came that interns 50 having about recently talking was group advisory the on fall-out. its and of 2008 crisis banking the since difficult creasingly in become has which generation next of the brightest the to attractive remain firms their ensuring is Parker like tives however. process hiring slowed not the down has panels verse volunteer.” to for them waiting actively. more women We’re around not moving about ently. we’re So thinking differ processes making decision the of terms in go about they It’s that just commitment. different any are them of one men. as readily as for jobs forward put to themselves tend women don’t that fact the discussed has group this said she and group sory it,” on woman said. she senior one She added one key decision was en was decision addedShe key one added:Parker “We’re do generally tar the itself set Trust has Northern Looking back, Parker said: “When I I “When said: Parker back, Looking of my “One colleagues said: Parker execu for chief challenge Another di ensuring said executive The chief added:She “It doesn’t either mean advi diversity aCEO on sits Parker

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Reflecting on Northern Trust’s 50 that time, there was“At the Cold Parker continued: arecontinu “We expect “We She added: to start evolv speed which at that.” do we years in Europe, Parker concluded: “We opened our first office in London1969 in and grown have to a considerable size in terms of our presence with 11 locations around EMEA and about 750 clients. and globalisationWar was increas ing whilethe term global custody was only just catching on. social The changes, changing ideas and the tech nology that supported all that of has been interesting those to over follow 50 Parker added. years,” technology withprovider deep FinTech expertise.” ing to invest in the assetservicing tech nology stack, around record golden think ideas.We that will impact the our do fund we way accounting,which is component a big our of business. ing our operating model next year to use some thoseof capabilities,which we think will improve the quality delivering we’re towhat clients and the of www.globalinvestorgroup.com ------TERESA PARKER, NORTHERN TRUST NORTHERN PARKER, TERESA

17 We opened our first office in London in in London office our first opened We a considerable to grown and have 1969 COVER STORY: COVER Prior her to appointment lead to the Europe, Middle East and Africa Before taking up the COO role, spent Teresa five years as head of Over the course of her 35 year career with Northern has Trust, Teresa Pete Cherecwich,Pete president Corpo of He added: “For the benefitof our cli Northern Trust and Broadridge Parker said: a custody “The of role a custodianShe continued: “As we global head of securities lending. business and regulatory affairs in the region. also Teresa sits on Northern Group. Management Corporation’s Trust (EMEA) region, spent Teresa three years as the chief operating officer for Asset Servicing with global responsibilityfor Northern Trust’s business model. operating and technology capabilities, Asia-Pacific overseeing (APAC), the rapid and extensive expansion of the region. the in presence corporation’s numerous held has and and Singapore London, in based been executive leadership roles including head of institutional and wealth management businesses in EMEA, global head of asset servicing and Teresa Parker Teresa ParkerTeresa is president for EMEA, responsible for Northern Trust’s rate & Institutionalrate Services North at ern Trust, said in “Northern June: Trust pioneeredthe block of development chain technology that supports the lifecycle.” PE complex entsand the industry it’s as a whole, time now to hand theover reins to a that was keeping those assets warm and dry whereas are we now operating in a cyber-security the Now role world. is making sure are you to secure able those assets, the do independent valua tions and provide services value added that.” on agreed in June that2019 the US fintech firmwould takeownership of the cus todian’s private equity fund adminis tration platform and responsibility for its ongoing development. bank is bringing all those technologies together and integrating them to create that secure environment. used to look after physical assets, so size in terms of our presence with 11 locations with presence of our in terms size clients. and about 750 EMEA around ------Custodians currently find them Clive Bellows, head of global fund Northern Trust has led the on debate “It’s not going tobe constantly “It’s at Parker said: “There’s research Parkersaid: “There’s out But But this is where Parker sees tech To illustrate herTo point, that she added Special 2019 Autumn curitytools, artificial intelligence,computing, advanced data analytics cloud and blockchain to name a few. but regulatory changes.” selvesdealing with various rapidly evolving technologies such as cyberse know their providers are going to keep their assets safe, with meaningful em phasis on transparency, integrity and of of the Custody Bank: much focus “Too on technology alone risks losing sight theof core mission. Clients need to dustry, it cannot it dustry, every solve problem”. servicesEMEA Northernat Trust, wroteinEvolution Custodians The 3.0: October a paper that2018 argued that, while “technology is an essential cata the for lyst future the of investment in ers to good people taking those jobs.” the future custody of and published in more productive, throughbut technol want to be attracting We ogy. people because technology has helped get rid some of the of elements that arebarri the other endthe of email. phoneor where I seeThat’s the future - to make thejobs more impactful,more creative, but arebut they really doing creative Are theywork? really doing impactful work?” ally hard they’re not really but produc tive. They spend so much time being constantly available on their emails esting, constructive work. thatnow re some says people work nology playing a positive by role, automating mundanefunctions and freeingstaff up focusto more on inter her two children, aged 18 and 20, have as her thattold want to work they don’t hard as she does. otherwise going to only it’s get a certain kind attracted person of to it.” who’s was right. I was lucky. But I think this next generation school of think leavers about their lives differently.The work place needs to think aboutthat because all.just I thought wasa great it career pathand greata opportunity. And I