Northern Trust
| File:Northern Trust logo.svg Northern Trust logo | |
| Company type | Public company |
|---|---|
| Industry | Financial services |
| Founded | 1 January 1889 in Chicago, Illinois, U.S. |
| Founder | Byron Laflin Smith |
| Headquarters | Chicago, Illinois , United States |
Area served | United States (20 states), Canada, Europe, Middle East, Asia-Pacific |
Key people | Michael O'Grady (CEO and Chairman) |
| Products | Asset servicing, Wealth management, Investment management |
| Website | northerntrust |
Northern Trust Corporation is a U.S.-based financial services firm headquartered in Chicago, Illinois, catering to corporations, institutional investors, and ultra high net worth clients. It is counted among the largest banking entities and stands as one of the longest-operating banks in the country. As of June 30, 2022, Northern Trust reported managing $1.7 trillion in assets under management and overseeing $17 trillion in assets under custody. The company is incorporated in Delaware.
With a presence spanning 20 US states and 23 countries—including locations in Canada, Europe, the Middle East, and the Asia-Pacific region—Northern Trust maintains a broad operational footprint. In February 2019, it was positioned at number 486 on the Fortune 1000 ranking.
Asset servicing
The Asset Servicing division provides global custodian banking, fund administration, investment operations outsourcing, investment management, risk and analytics services, employee benefits administration, securities lending, foreign exchange transactions, treasury management, brokerage services, transition management, banking services, and cash management solutions. Its clientele consists of corporate and public pension funds, foundations, financial endowments, fund managers, insurance firms, sovereign wealth funds, and various institutional investors. In May 2020, Northern Trust entered into a strategic partnership with BlackRock to collaborate on BlackRock’s Aladdin platform for shared clients.
Wealth management
Serving more than one-fifth of the wealthiest families in the United States, Northern Trust’s wealth management segment delivers personal trust services, investment management, custodian banking, philanthropic advisory, financial consulting, guardianship and estate administration, qualified retirement plans, as well as private and business banking. This division primarily targets high-net-worth individuals and families with assets typically exceeding $75 million. Services are provided through 85 offices located across 18 U.S. states and internationally in London, Guernsey, and Abu Dhabi.
Northern Trust Asset Management (NTAM)
NTAM offers investment management solutions that encompass active and passive equity and fixed income strategies alongside alternative asset classes such as private equity and hedge funds. It also provides multi-manager investment products.
History
Established in 1889 by Byron Laflin Smith within Chicago’s Rookery Building with an initial capitalization of $1 million—40% contributed by Smith himself—and opening deposits totaling $137,981.25 from seven accounts. Early investors included notable figures like Marshall Field and Philip D. Armour. The headquarters at 50 South LaSalle Street debuted in 1905 as a five-story building constructed with future expansion in mind; a subsequent 14-story addition designed by Cesar Pelli was completed in 1965.
Following Byron Laflin Smith’s death in 1914, his son Solomon Albert Smith assumed leadership. The company’s prudent policies allowed it to grow its assets throughout the Great Depression while many competitors failed. By 1941 nearly half of its commercial accounts were located outside Chicago; during World War II the bank expanded through war bond campaigns and financing for war-related manufacturing.
In the 1950s Northern Trust made significant investments in automated banking technologies including pioneering fully automated financial statements for trust clients. Leadership transitioned upon Solomon A. Smith’s death in 1963 when Solomon Byron Smith became chairman of the executive committee and his brother Edward Byron Smith took over as chairman.
In 1986 the bank acquired First Lake Forest Corporation for $61 million in cash. Edward Byron Smith stepped down as CEO in 1979; subsequent leaders included E. Norman "Bud" Staub followed by Philip W.K. Sweet who resigned in 1984. Weston Christopherson served as CEO from 1984 to 1990 navigating difficulties from troubled Latin American loans triggered by the early-1980s oil price collapse; under his leadership profits rose from $34 million to $113 million.
David W. Fox was appointed CEO in 1990. William A. Osborn joined as president and COO in 1993 before becoming chairman and CEO in 1995. In 2005 Northern Trust reached a $365 million settlement with Enron employees over alleged mismanagement of their 401(k) plan; this amount was later reduced to $32.5 million without any admission of fault.
Osborn retired from the CEO role in 2008; Frederick H. "Rick" Waddell succeeded him and steered Northern Trust through the financial crisis of that year. The bank was among a select group maintaining dividends and profitability during those turbulent times.
In November 2008 the U.S. Treasury invested $1.5 billion into Northern Trust under TARP; the company repurchased this capital by June 2009 despite facing criticism for its sponsorship expenditures during that period.
Northern Trust dedicates roughly 1.5% of its pre-tax earnings annually to philanthropic efforts; over $120 million was contributed to charitable organizations during the decade leading up to 2014.
In 2017 Northern Trust expanded its international reach by acquiring UBS Asset Management’s fund administration operations located in Switzerland and Luxembourg.
Michael O'Grady took on the CEO role in 2018 and became chairman in January 2019, continuing Northern Trust’s emphasis on stability and client-focused service.