US-based asset management firm Westwood Holdings Group has selected custodian Northern Trust to provide outsourced trading through its integrated trading solutions (ITS) service.
Northern Trust will be responsible for the $12 billion asset management firm’s equity and fixed income trading, as well as its middle-office trade settlement support.
“Partnering with Northern Trust to outsource portions of our front- and middle-office operations will provide benefits to both our operations and our clients’ performance reporting,” said Fabian Gomez, chief operating officer at Westwood Holdings Group.
“Internally, we gain access to greater flexibility and scalability with our trading operations, as well as the accompanying cost savings. Meanwhile, we can serve our clients better by providing increased transparency into elements like execution, transaction costs, and detailed cost analysis.”
According to a report from Northern Trust in September, the demand for outsourced trading services has increased significantly over the last year as many firms looked to alleviate operational pressure brought on by the pandemic.
The white paper highlighted how a ‘fourth wave’ of outsourcing had been instigated by accelerated challenges faced by firms during the pandemic including pressure from competition, fees, regulatory and compliance challenges, technology costs, and shifting product demand.
Northern Trust has witnessed an uptake of new business from major institutional firms in recent months that suggest there is some truth behind this.
In May last year, the custodian formed a partnership with buy-side heavyweight BlackRock to create an end-to-end investment ecosystem for both its asset manager and allocator clients.
This news was followed in December with the announcement that the firm had attracted the interest of $5.1 billion US hedge fund Strategic Global Investors who employed the services of Northern Trust for a unique servicing mandate to provide middle-office outsourcing and FX dealing.