Northern Trust has researched and selected third party investment managers for over twenty years. Our decades of combined experience as pension directors, consultants and fund managers give us a rich perspective on investing, spanning numerous markets and asset classes globally. These common experiences underpin a rigorous, uniform investment process, resulting in consistent returns for our clients.
Confidence is the currency of our trade. Nothing gives us more confidence in our managers than understanding their investment processes and portfolios. We use an interactive, investigative process to develop this understanding, combining the following qualitative and quantitative techniques.
Portfolio Manager Qualitative Investigation
Our qualitative investigation focuses on the portfolio manager and his or her supporting team. We try to understand the role, training, personality and decision-making habits of each professional within the context of the firm's ownership and incentive structure. Compiled through on-site and off-site interviews and reference checks, this background helps us to avoid surprises by understanding or even anticipating how the investment manager will react in a variety of market circumstances.
Successful Portfolio Manager Personality Traits
We find that successful portfolio managers exhibit independent thinking, strong personal discipline and intellectual flexibility. They have exceptional histories and demonstrate deep understanding of and commitment to their business. Successful groups have strong leadership, a crisp, non-bureaucratic decision making process and a high energy level, all of which encourage creativity and risk taking.
Quantitative Portfolio Performance Review
Unlike consultants who screen managers based on historical performance, our quantitative review comes second and aims to verify the conclusions of our qualitative due diligence using both performance and portfolio data. The following are some of the fundamental questions we try to answer:
Investigation of Inconsistent Results
The last of these questions is especially important, for our own investment process is intended to be both iterative and interactive. When we find an inconsistency in the data, we do not view it as marking the end of our decision process, resulting in the rejection of the manager. Instead, we view it as an opportunity to circle back and improve our understanding before rendering a final decision
Margret Duvall is a senior solutions strategist in Northern Trust Asset Management’s multi-manager solutions practice. Margret focuses on business development for a wide range of corporations, foundations, endowments, not-for-profit, and health care organizations, to help them achieve their investment goals through the development, implementation, monitoring and evaluation of their investment programs.
Previously, Margret led the product management team responsible for Northern Trust’s multi-manager solutions business in both personal and institutional markets. Margret oversaw the development, evaluation and maintenance of total outsourcing programs, alternative investments, including hedge fund of funds and private equity fund of funds, as well as emerging manager programs.
Margret served as the president of the NT Alpha Strategies Fund and the NT Hedged Equity Fund, both a diversified closed-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). Margret joined Northern Trust in 2004 as a product manager. Before joining Northern Trust, she was employed by Harris Associates as a portfolio associate.
Margret received her MBA from Northwestern University and her bachelor’s degree in English from Oberlin College. She has FINRA Series 7 and 63 licenses.
© 2019 Northern Trust Corporation. Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A. Incorporated with limited liability in the U.S. Products and services provided by subsidiaries of Northern Trust Corporation may vary in different markets and are offered in accordance with local regulation. For more information, read our legal and regulatory information about individual market offices.
Northern Trust Asset Management is composed of Northern Trust Investments, Inc., Northern Trust Global Investments Limited, Northern Trust Global Investments Japan, K.K., NT Global Advisors, Inc., 50 South Capital Advisors, LLC, and personnel of The Northern Trust Company of Hong Kong Limited and The Northern Trust Company. This material is directed to professional clients only and is not intended for retail clients. For Asia-Pacific markets, it is directed to expert, institutional, professional and wholesale investors only and should not be relied upon by retail clients or investors. Issued in the United Kingdom by Northern Trust Global Investments Limited.