Brennan Hawkin

Brennan Hawkin asked about Northern Trust's strategy of allowing more marginal business to roll off, questioning if this prioritizes profit growth over top-line growth and if it might lead to top-line headwinds offset by better unit economics. He also sought clarity on any fee rate pressure experienced in the Asset Servicing and Investment Management businesses, separate from GFO.

Answer

Michael O'Grady, Chairman and CEO, confirmed the focus on profitability, particularly in Asset Servicing, aiming for greater profitability and growth in profitability even if it impacts gross top-line growth. He detailed efforts to improve margins through accretive new business, optimizing existing activities, and enhancing operational efficiency via the client-centric, capability-driven operating model. O'Grady noted consistent, persistent pressure on asset management fees but no specific reduction in servicing fee levels, emphasizing disciplined pricing for accretive margins.

Brennan Hawkin inquired about Northern Trust's strategy of allowing more marginal business to roll off, asking if this indicates a focus on profit growth over top-line growth and potential top-line headwinds. He also asked if there was fee rate pressure in the servicing and investment management businesses, separate from GFO.

Answer

Chairman and CEO Michael O'Grady confirmed the focus on profitability, ensuring new business comes in at accretive margins, and improving efficiency through their client-centric, capability-driven operating model. CFO David Fox noted consistent, persistent pressure on asset management fees but no specific reduction in servicing fees, emphasizing disciplined pricing for accretive margins.

Brennan Hawkin inquired about how much more substantial the private markets base (Carta + Solium) is now compared to 2021, given the robust capital markets activity.

Answer

CFO Sharon Yeshaya stated that it's 'just the beginning,' emphasizing how the workplace channel, across net new assets and IPOs, is building out the integrated firm. She highlighted the ecosystem's potential to work with companies and founders throughout their entire lifecycle, from inception to market.