Gerard Cassidy's questions to NORTHERN TRUST (NTRS) leadership • Q3 2025
Question
Gerard Cassidy asked about Northern Trust's low exposure to loans to non-depository financial institutions (NDFI), seeking color on how the company views categories within NDFI like private equity and mortgage credit intermediaries. He also inquired about Northern Trust's approach to managing wealth management clients in the event of a significant market correction, given recent warnings from the IMF and Bank of England about inflated asset prices.
Answer
David Fox, Chief Financial Officer, clarified that Northern Trust's NDFI exposure primarily consists of subscription lines to private equity firms (backed by LP capital commitments), loans to management companies (secured by management fees), and diversified NAV loans on the wealth side with low advance rates. Michael O'Grady, Chairman and CEO, emphasized their 'goals-driven wealth management' approach, which involves determining clients' lifetime needs upfront to establish appropriate asset allocation. This strategy includes ensuring sufficient reserve capacity and risk-off assets to navigate market drawdowns, helping clients remain focused on long-term goals rather than overreacting to volatility.