Fresh off Northern Trust’s wins at the Funds Europe Awards 2024—securing European Private Markets Administrator of the Year and European Transfer Agent of the Year—Clive Bellows, head of global private capital administration and president, Emea, Northern Trust, shares insights on innovation, challenges, and opportunities shaping the future of private market investing.
Northern Trust secured the European private markets administrator of the year award due to its strong presence across key European markets and its ability to handle complex fund structures with ease. The firm’s comprehensive custody and FX services, paired with top-tier customer service and a client-first focus, truly set it apart, according to the judges. Northern Trust has not only attracted notable new clients but also demonstrated a proven track record of delivering consistent, high-quality results. What further impressed the judges was its long-term commitment to technology investment, showcasing the firm’s dedication to innovation and staying ahead in an evolving industry. Northern Trust also won the transfer agent award for its strong investment in Europe, according to the judges.
How do you see the evolution of private markets impacting the demands for asset servicing in Europe, particularly as fund structures grow more complex?
As interest in private markets grows, the profile of investors is evolving – from today primarily comprising institutions and high-net-worth individuals to encompassing a broader range of investors. This will create opportunities for asset managers but also complexity and challenge in how funds are structured, and investors serviced. As their investor base grows, managers may require, for example, greater operational flexibility, capacity, and connectivity with distribution platforms.
In Europe, this shift is demonstrated by rising interest in semi-liquid funds, a response to investors’ appetite for products providing private market exposure with a measure of liquidity. As private market investing moves to the mainstream of the investment industry, this will drive new types of fund products with operating models and servicing requirements that will vary depending on investment strategies, assets, and target investor profiles.
What emerging technological trends do you believe will redefine the private markets landscape, and how is Northern Trust leveraging innovation to stay ahead?
Northern Trust is leveraging technology to help automate and digitise the administration processes on which managers of private capital funds have traditionally depended, such as manual checks for order confirmations, or to confirm investor onboarding details. The forecast growth in allocations to private markets and impending democratisation of the asset class means these are no longer fit for purpose.
Solutions such as digital portals are helping make such approaches obsolete by accelerating lifecycle processes, smoothing administration, and providing secure channels for data exchange. Looking to the future, market entrants without robust operating models and technology infrastructure, or the support of suitable partners to assist, will find it challenging to launch funds and retain clients.
What key trends do you see shaping the growth of private markets globally, and how do you think these trends will impact investor demand and operational priorities in the coming years?
Asset allocators have long leveraged private investments for portfolio diversification, but many struggled with their relative opaqueness as an illiquid asset class and the associated transparency and valuation issues. The growth of private market allocations will see investor demands for transparency come further to the fore – along with requirements for technology that can enable this.
Many investors will require a consolidated view of their fund’s exposure across both traditional and private investments, along with confidence that the data is timely and representative of real-time scenarios. Today’s solutions make it possible to integrate data and portfolio analysis for private and public assets, and we will see a focus on closing the transparency gap between private and traditional investments as an operational priority.
“As private market investing moves to the mainstream of the investment industry, this will drive new types of fund products with operating models and servicing requirements that will vary depending on investment strategies, assets, and target investor profiles.”
What do you see as the biggest challenges and opportunities currently shaping the transfer agent industry in Europe?
Transfer agency remains central to our clients’ investor administration, growth, and distribution strategies. There is increasing focus on the use of data to drive new efficiencies, heighten flexibility and enhance experiences, both for our asset manager clients and their investors. Improving investor experiences is increasingly a strategic objective for managers and an area where leveraging technology can help them differentiate their offerings.
Additionally, as private markets come to the fore, providers will need to integrate investor servicing capabilities across both traditional and alternative funds, seamlessly supporting hybrid portfolios of liquid securities and illiquid investments.
Finally, what makes your firm stand out?
Our ability to service all asset classes across both private and public markets – from the most traditional to the most complex fund types – coupled with global solutions that support our clients across the entire enterprise of their front, back and middle office functions.
Additionally, our focus on service excellence and ability to align with our clients’ strategic focus and priorities. Whether clients are seeking to increase scale, improve efficiency and resiliency, or remove undue complexity from their operations, our role as their asset servicing provider is to help them achieve their strategic objectives.
