The Exchanges

Q How did you go from this breadth of experiences from trading to operational support to operations to working on this huge merger to Emory, your next step kind of on the buy side?

A Yeah, so it's interesting. So I got married and we were living in New York City and And I got pregnant, and so we decided to move back home to Atlanta, and that's where both of our families were from, and, and so I commuted for quite a while between Atlanta and New York with an infant, and that cut to be pretty difficult, and so I came across a job listing for Chief Operating Officer at Emory University Endowment, and the job listing had enough of things that I knew a little bit about, enough to be dangerous, if you will, so I was going to be responsible for everything outside of investing, So that would be operations, technology, risk, HR, legal, finance, things that I had done a little bit of at Morgan Stanley again, but was pretty naive in terms of the endowment world at large and the buy side. And so everyone that I respected in my career at that point said jump at this opportunity. If you get this job, take it. It's one of the best things that'll ever happen. And it was certainly. So I thought I knew what alternative investments were until I took that role. And I have to say, I got by in that role As Emory's first COO of the endowment, really with the help of some amazing peers in the endowment and foundation community, I spent probably the first few months just calling. We were, I think, number 16 in terms of the top 20 endowments. I called the 15 ahead of me and asked th…

AI assessment note: “I came across a job listing for Chief Operating Officer at Emory University Endowment”

Q Let's roll forward to today. It's been a few years in this seat. Why don't you describe this asset owner business that you're overseeing today?

A Yeah, sure. So the first four or five years at Northern were spent focused on building and launching front office solutions. So we have north of four hundred and fifty billion on the platform now. We launched about three and a half years ago. Some really incredible clients across the Pension Endowment Foundation, healthcare, family office space. And so earlier this year, I was given responsibility for the overall asset owner business in the Americas, and what that means is all of our corporate clients, insurance companies, endowments foundations, healthcare institutions, public pensions, as well as our multinational government organizations. I have that overall business at Northern. It's about half of Northern's assets under custody at large, and it's about 20% of the bank's revenue, so it's a really big, important business for Northern. And one, as I mentioned, we've had an unwavering commitment to. So any client that gets custody, accounting, performance, analytics, banking and credit, or asset management services from us that falls into that category is within the business.

AI assessment note: “It's about half of Northern's assets under custody at large, and it's about 20%”

Q Well, why don't you take me back to your background and the path that ultimately led to Northern Trust?

A Sure. Yeah, so I grew up in South Georgia, daughter of two government workers, blue collar environment, went to University of Georgia and majored in political science, was really sure that I was going to go into politics or law. And on my way out of University of Georgia, someone said to me, you really want to go into international M&A for some reason? I don't know why he said that to me, but he said, go get a JD MBA. But before you do that, you'll need to get some finance experience. And having had a political science degree, I knew nothing about finance and applied for a job at Bear Stearns and got it. And so I walked into Bear Stearns at age 20, having not graduated yet, and didn't know the difference between a stock and a bond. Literally had to ask someone what credit meant on the first day and felt like an idiot. But Really had an incredible year there. The Dow 10,000 in March of 99 was my first day at Bear Stearns, and so I worked on the middle markets trading desk, trading equity IPOs that summer. Graduated from University of Georgia and then made the transition into a firm that was doing municipal bond underwriting of all things. So we took defaulted healthcare facilities. Formed management committee, bought up all of the junk bonds and refinanced these healthcare facilities. So I had gone from really deep sort of experience trading equities into doing some bond underwr…

AI assessment note: “I grew up in South Georgia, daughter of two government workers”

Q Now, what did you find when you had seen the tech stack at Morgan Stanley, and then came into Emory, both what you saw at Emory and the conversations you had with these other large endowments?

A Yeah, I mean, I was super naive. I think I had grown up with amazing technologists and engineers, anything that we could dream of or conceive of, we built. And there were vendors, you know, that we used certainly in the landscape at Morgan Stanley, and so when I got to Emory, I thought, well, maybe they just haven't had the experience, or they just have never implemented systems before, and so they just haven't found the right one. So to take a step back, my mandate at Emory was threefold. One was to institutionalize the operations of the portfolio, really make sure from a risk and legal and compliance tax audit perspective, we were doing what we needed to do in an institutional class way. Two was to create an operational due diligence program across both asset classes, so both public and private markets, which at the time, not a lot of people were doing ODD on private equity, and so that was really fun to establish that. And then the third part was to buy or build a technology stack that would meet the needs of our investment team, who coming out of the financial crisis, like most other institutions, were really struggling with understanding exposure and liquidity in a way that looked through the entire asset pool, even if it were in commingled funds or in limited partnerships. So I set out somewhat naively thinking I'll just find the right vendor and implement. I've done this…

AI assessment note: “came to the realization... that there weren't any fit for purpose tools in the endowment”

Q So, so many people told you this would be just the most amazing job, and yet after a number of years doing everything you could, you decided to leave. So what was the path and that impetus for moving from the by-side of the by-side at Emory to this, to this new seed at Northern Trust?

A Yeah, it still was the most amazing job when I left. There were lots of, of tears and nervous moments involved. I think somewhere along the way, I just became passionate about creating a new solution for the marketplace and really something that I would have wanted to buy myself having been in that seat and something that I would be proud to go back to my friends in this endowment and foundation community and sell them. And so I started shopping the idea around. I spent a ton of time, probably a year really talking to all of my peers about the idea that I had, getting feedback from them. I ended up with a term sheet from a large private equity firm that had just bought a hedge fund administrator. And so the idea was that they would kind of bolt this on to their investment in a hedge fund administrator. And so we would create an asset allocator specific offering. And I was very close to taking that offer and came across the now president of Northern, Pete Cherowich, my boss. And he said, I'm looking to try to figure out what we need to do next for asset allocators. Can you spend some time with me to talk to me about that? And I said, sure, I'm happy to, but I just want you to know a year from now, I hope to be eating your lunch. And so he said, no, like come do this at Northern. Let's think about how we would seed you like a venture investment, basically stand you up with capita…

AI assessment note: “I just became passionate about creating a new solution for the marketplace”

Q So what did you do with that challenge in your time at Emory?

A Yeah. So we implemented some incredible technology and we shored up the operations and tried to make the data quality as great as possible. So when I got there, the operations team was Much smaller, working on much older tool sets and doing everything very manually. We didn't have a lot of maker checker rules in place. The investment team would be very frustrated at the lack of data quality that they were working with. And of course, if you make a bad investment decision off of bad data, there are big consequences for the institution. So the first thing was really to kind of shore up the data quality and upgrade the system. So we upgraded and had Some really great systems in place, but we still had five or six different systems that had to be pulled together every time an investment decision really needed to be made across the portfolio. As much as every institution has some sort of permutation of a CRM system and a performance system and a risk system in some way that they're tracking liquidity and they have a custodian, they still are responsible for shipping data between those systems and making sure that it all matches and, and still living on spreadsheets at the end of the day.

AI assessment note: “we implemented some incredible technology and we shored up the operations”

Q You mentioned the competitive landscape when you came in and people looking at the same issues. I'm curious when you're talking to a prospect, what is it that the pitch for the front office solutions at Northern Trust is differentiates from what you see in some of your competitors?

A Yeah. I mean, for us, it's the people and it's the service offering. So we're not a technology company trying to do some service and trying to understand how to operationalize. In fact, the capital structures of most of these VC backed fintechs are, are not well suited to offer operational services just because the revenue and margin looks very different, right? So I think it's the people and we talk about the strength of the team and the experience that they have. And so from a technology feature and function perspective, you can line that up, but if you're not with a partner that can help you Get the data into the application and make sure that it's correct and understand your book and understand your assets. You are not well positioned. I think what's happened over time with the two competitors that were most kept me up at night in the early years is they've both been bought out by larger strategic investors. And so for a long time at Northern, we were taking a very different approach from our competitors in the bank space because we were spending so much money building our own capability and the other banks had partnered with my competitors. What I knew about my strategy going forward is that I wanted control of the value to the client. I didn't want to give that up. And so it was much more expensive. It was much more difficult. We got to market later than we wanted to cert…

AI assessment note: “for us, it's the people and it's the service offering.”

Q So as an aside, what was your favorite ODD story?

A My absolute favorite ODD stories were the ones where the CFO or COO would call me over weeks and months later and ask for advice or want to see our due diligence report and really want to learn and get better from it. And so they would call me sometimes to interview employees for them or to help them negotiate deals with their service providers. So that was the true benefit. I've got some funny stories as well. Certainly I have one where I knew what the fund was doing was illegal and called my buddy at the SEC. And then a few years later, he sent me an article where they had, they had lost their license. So that was a gratifying story, but not one that you want to happen often in your ODD process.

AI assessment note: “My absolute favorite ODD stories were the ones where the CFO or COO would call”

Q When you look at the exposures of, let's say, a typical client who's using that, let's just call it old school strategic asset allocation, and another that takes this total portfolio approach, are there consistent differences that you tend to see in the underlying portfolios?

A Probably not. I think it's a great question. I think you have to have a certain size and scale to your organization to be able to take that approach to asset allocation. It just requires a lot more data and a lot more work. And so certainly, The asset pools may look the same, but the way that the decisions are being made are quite different. I think that we do see certainly hedging and overlay programs and portable alpha programs and programs that are more quantitative or more data driven happening in organizations that are doing the work to analyze their exposure. And I think we're seeing much more dynamic shifts in the portfolio. So while the assets may look the same, we're certainly seeing more active trading and more active hedging that's happening on a day to day basis. I think we have some investors who are getting incredibly smart about the way that they're thinking about their balance sheets and how they're using collateral in the portfolio, how they're thinking about leverage in the portfolio. So some of those shifts certainly are different.

AI assessment note: “Probably not... The asset pools may look the same”

Q Yeah. Which two people have had the biggest impact on your professional life?

A This is such a hard question to answer because I've had dozens. I think two really stand out. One, I had a manager at Morgan Stanley, Mike Lamenta, who now runs Wealthspire. He was an English major at Notre Dame, and I had a bad habit of really just blasting people in emails. I wasn't very polished or professional in my approach sometimes, and Mike would call me over to his desk and say, hey, will you help me out with the grammar of this sentence on an email? And he did not need me to read his email and give him any English grammar advice, but it was his way of showing me how he constructed a tough email and delivered a tough message without being As brutal maybe as I had been. And so in hindsight, I didn't figure it out immediately, but eventually thought back on that and thought he was trying to show me how to be better, how to do better without making me feel bad about it. The second person I would say is someone that I worked for at Northern Trust who was there on the days that it was really tough to try to stand this business up and try to keep faith and do the hard work that it took to change the bank in doing so. And, and so my management team at Northern Trust got me through some really tough days and I'm glad that they did.

AI assessment note: “I think two really stand out. One, I had a manager at Morgan Stanley”

Q Great. So one last question before I turn to a couple of fun closing questions, which is what do you aspire to achieve with your group over the next couple of years?

A Yeah, for us, the strategy is helping our clients make better investment decisions, and that can be the effectiveness of those decisions or the efficiency of those decisions. And so for me to be able to do that, I have to have a team that really, truly understands the complexity of the assets that our clients are investing in. And understands the demands of the investment process and how that works. And it's different at each institution. Of course, everyone has their own flavor to their investment process, but understanding the considerations in the marketplace for our clients, having that empathy for our clients is something that we have to have in order to grow and to survive going forward. So my goal is to build a team that is agile and one that is going to be able to change as quickly as the market changes and one that can speak the language that our client speaks.

AI assessment note: “my goal is to build a team that is agile”

Q Let's walk through each of those. So start with where you initially came at this from performance analytics and risk. How have you built it up so that ideally there's one system and the asset owner isn't trying to manually enter things to make sure that they can understand what they own?

A Yeah, I mean, the core tension between asset owners and custodians right now is that over the last few decades, custodians really were the books of record that most asset owners were making their decisions from. But accounting books and custody books are not really fit for purpose for making investment decisions, and so they're meant to be monthly, they're meant to be settlement date based, and as asset owners and allocators started making more investment decisions in-house and started doing that more frequently, Those books of record just become stale and they become insufficient for the needs of the investment team. And so what we're seeing on a wholesale basis, what we did with front office solutions was try to provide what we would call an investment book of record for an allocator. So they're not coming in for the most part and trading right every morning on a set of positions like an asset manager would be, but they need a daily updated view of their portfolio across risk, liquidity, performance, exposure. And need that in a way that seamlessly ties together their private capital assets with their public assets. And so the public assets have never been the problem. It's very easy to get market data on a daily basis, very easy to get portfolio characteristics and attribution and risk metrics on those portfolios. But doing the hard work to get the alternative investments, t…

AI assessment note: “what we did with front office solutions was try to provide what we would call an investment book of record”