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F500-2021-443-Northern Trust

The wealth and investment management company offers a broad catalogue of financial services for wealthy institutions, individuals, and families.

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Chicago-based Northern Trust focuses on financial services for corporations, institutional investors, and ultra-high-net-worth individuals. It grew revenue by 3.5% in 2019.

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Northern Trust was founded in 1889 by Byron Laflin Smith. Disturbed by the excess and corruption that marked the Gilded Age, he vowed to create a financial institution Chicago’s growing class of investors and businesspeople could trust. On day one the company opened six accounts with $137,981 in deposits; by the end of 2024 Northern Trust had more than $1.6 trillion under management. Over the years Northern Trust was a pioneer in many areas, including being one of the first U.S. corporations to offer employees free life insurance and a pension plan, operating the first air-conditioned office building in Chicago, and being one of the first banks in the country to process checks electronically. Today it provides asset servicing, investment management, and wealth management services for institutions and high-net-worth individuals and families, and employs more than 23,000 employees around the world.

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Northern Trust (NTRS): Company Profile, Stock Price, News, Rankings

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Northern Trust

northern trust

Day, and welcome to the Northern Trust Corporation First Quarter twenty twenty five Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Jennifer Child, Director of Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. Welcome to Northern Trust Corporation's first quarter twenty twenty five earnings conference call. Joining me on our call this morning is Mike O'Grady, our Chairman and CEO Dave Fox, our Chief Financial Officer John Landers, our Controller and Trace Stegman from our Investor Relations team. Our first quarter earnings press release and financial trends report are both available on our website at northerntrust.com. Also on our website, you will find our quarterly earnings review presentation, which we will use to guide today's conference call.

This April 22 call is being webcast live on northerntrust.com. The only authorized rebroadcast of this call is the replay that will be made available on our website through May 21. Northern Trust disclaims any continuing accuracy of the information provided in this call after today. Please refer to our safe harbor statement regarding forward looking statements on page 12 of the accompanying presentation, which will apply to our commentary on this call. During today's question and answer session, please limit your initial query to one question and one related follow-up.

This will allow us to move through the queue and enable as many people as possible the opportunity to ask questions as time permits. Thank you again for joining us today. Let me turn the call over to Mike O'Grady.

Thank you, Jennifer. Let me join in welcoming you to our first quarter twenty twenty five earnings call. Our first quarter results demonstrate the strength and resilience of our business model. We generated our third consecutive quarter of positive operating leverage, driven by mid single digit growth in both trust fees and net interest income, while managing expenses well. EPS, excluding notables, increased 13%, and we generated a return on common equity of 13%, both while boosting capital levels meaningfully and returning $435,000,000 to shareholders.

Our results benefited from strong underlying market performance and elevated volatility levels, which drove strong capital markets activity late in the quarter and extended into April. Our performance also reflects continued progress implementing our One Northern Trust strategy, our road map for becoming a consistently high performing company and producing meaningful value for all stakeholders. Let me give you an update on our progress. First, optimize growth. We entered 2025 with good momentum, continuing to embed collaboration between our business units, leveraging the capabilities of the entire firm.

We advanced our enterprise wide growth initiatives, which align with key client needs and opportunities, including alternative investment solutions, family office services, and liquidity solutions. We also concentrated on core initiatives within each of our business units. As it relates to alternatives, fundraising is particularly strong within our Asset Management segment, and we are on track to nearly double our capital raise versus prior year averages. Within Asset Servicing, new business activity in the first quarter was brisk, particularly within private markets where our technology and operational expertise have been consistent differentiators. During the quarter, we were selected as the global outsourced private capital administration provider for Igneo Infrastructure Partners, a $20,000,000,000 alternatives manager specializing in global infrastructure investments.

Expanding upon our long standing relationship with private equity firm Alchemy Partners, we were awarded the asset servicing business for a new $1,000,000,000 special opportunities fund launch. Semi liquid funds and the democratization of private markets globally remain an important area of focus, and we extended our leading market share in the quarter. Northern Trust is currently supporting over half of the approved long term asset funds or LTAS in The UK, with an additional 10 in the pipeline. Building upon the strength of our upper tier wealth business, our wealth management segment formally rolled out a dedicated ultra high net worth segment, which we've named Family Office Solutions, focusing on wealthy individuals and families with more than $100,000,000 in net worth. Already, we've seen very good client traction.

Performance in our global family office also continues to be strong. New business activity remained robust, particularly within international markets. During the quarter, we onboarded several marquee relationships in EMEA, strengthening our position as one of the leading administrators of private investment office assets in Europe. As it relates to liquidity, we've seen a healthy increase in deposit levels as a number of clients have taken a risk off approach, reallocating portfolios and raising cash. In asset management, we generated positive liquidity flows in the first quarter, continuing the trend we've seen over the past nine quarters.

Beyond liquidity, our suite of actively managed offerings, which skew towards high quality, low volatility and tax efficient products, tend to perform very well in the current environment, and we're seeing significant client interest. We had $1,700,000,000 of inflows into our custom tax optimized SMAs, which are capitalizing on market volatility to deliver increased after tax value. We're also broadening our ETF platform, having recently filed to launch 11 new fixed income ETFs later this year. Meaningful progress was also made against our other two strategic pillars, strengthening resiliency and managing risk and driving productivity. We continue on the multiyear effort to uplift our risk and control system.

We transition from design to implementation of new capabilities that will better enable us to systematically anticipate, identify, manage, and control risks across all areas of our organization. We also advanced along our technology journey, driving towards a more stable, scalable, safe and secure environment for our stakeholders. Productivity initiatives for 2025 are well on track, fueling further critical investments in growth. Within the office of the COO, we're reengineering our operating model to enhance efficiency, standardize services, and streamline processes. At the same time, we're making continued headway with workforce initiatives and third party spend, including pursuing further vendor savings.

To wrap up, we're off to a solid start to the year. While we face a highly challenging macroeconomic and market backdrop, we enter the current environment well positioned to navigate a wide range of outcomes. Our balance sheet strength allow us to meet the evolving needs of our clients while pressing ahead with our strategic objectives. And with that, I'll turn it

over to Dave to review the financials. Dave?

Thanks, Mike. Let me join Jennifer and Mike in welcoming you to our first quarter twenty twenty five earnings call. Let's discuss the financial results of the quarter starting on Page four.

This morning, we reported first quarter net income of $392,000,000 earnings per share of 1.9 dollars and our return on average common equity was 13%. As Mike mentioned, we delivered our third consecutive quarter of positive total operating leverage. We also reported our fourth consecutive quarter of positive trust fee operating leverage, both excluding notables. Relative to the prior year, currency movements unfavorably impacted our revenue growth by approximately 20 basis points and favorably impacted our expense growth by approximately 50 basis points. Currency movements were immaterial relative to the prior period.

As a reminder, year over year comparisons reflect one fewer day this year as last year's first quarter included an extra day in February due to leap year. Trust investment and other servicing fees totaled $1,200,000,000 a 1% sequential decline and a 6% increase compared to last year. Net interest income on an FTE basis was 574,000,000, essentially flat compared to the prior period and up 7% from a year ago. Our assets under custody and administration were up 1% sequentially and up 3% as compared to the prior year. Our assets under management were flat sequentially and up 7% year over year.

Overall, our credit quality remains very strong. Excluding notable items in all periods, other noninterest income was down 9% sequentially and down 4% over the prior year. Revenue was down sequentially 1% and up 6% on a year over year basis. Expenses were up 3% sequentially and up 4.8% over the prior year, and earnings per share decreased 16% sequentially, but increased 13% compared to the prior year. Turning to our Asset Servicing results on page five.

Our Asset Servicing business performed well in the quarter. Transaction volumes were healthy, capital markets activities were up double digits over the prior year and new business growth continues to be booked at attractive margins. Assets under custody administration for asset servicing clients were $15,800,000,000,000 at quarter end reflecting a 3% year over year increase. Asset servicing fees totaled $672,000,000 Custody and fund administration fees were $453,000,000 up 4% year over year, largely reflecting the impact from strong underlying equity markets and new business generation. Year over year comparisons were dampened by the client exits we discussed in the second quarter of last year.

Other fees were $48,000,000 up 7% year over year, largely reflecting growth in our front office solutions product as well as higher seasonal benefit payments. Assets under management for asset servicing clients were $1,200,000,000,000 up 7% over the prior year. Investment management fees within asset servicing were 153,000,000 up a strong 9% year over year due to favorable markets and new business activities. Now moving to our Wealth Management business on Page 6. Wealth Management also had a healthy quarter with continued strength in our global family office business.

Assets under management for our wealth management clients were $447,000,000,000 at quarter end, up 6% year over year. Trust investment and other servicing fees for wealth management clients were $542,000,000 up 8% year over year, primarily due to strong equity markets. Moving to page seven on our balance sheet and net interest income trends. Our average earning assets were up 3% on a linked quarter basis, fueled by higher deposit levels, which drove an increase in cash held at the Fed and other central banks. The duration of our securities portfolio remained at one point six years and the total balance sheet duration continues to be less than one year.

Net interest income on an FTE basis was $574,000,000 flat with the fourth quarter, and our net interest margin was 1.69%, down two basis points quarter over quarter. NII outperformed our expectations largely due to higher than expected deposit levels. Average deposits were $116,000,000,000 up 3% compared to fourth quarter levels. Within this, interest bearing deposits increased by 4% and non interest bearing deposits decreased by 3%, but remained at 15% of the overall mix. Deposit pricing was largely as expected.

Institutional deposit betas remained high and wealth deposit betas were stable. The quarterly contribution from transactional and other items returned to more normal levels. Turning to our expenses on Page eight. Non interest expense was approximately $1,400,000,000 in the first quarter, up 3% sequentially and 4% as compared to the prior year. Excluding notable items in the prior period as listed on the slide, expenses in the first quarter were up 4.8% year over year, an improvement from the fourth quarter's '5 point '5 percent year over year increase.

Let's go back and review our core expenses from the quarter. Compensation expense was up 8% sequentially, largely reflecting the impact of our seasonal equity incentive grants. Comp expense increased 3% over the prior year resulting from modest levels of hiring associated with our modernization initiative and underlying growth in the business. Outside services expense increased 7% relative to the prior period largely due to higher levels of spend associated with our modernization and resiliency initiative, but it was down 3% sequentially as this same spend started to flatten out. Equipment and software expense increased 11% year over year, mostly related to higher depreciation and amortization expense and costs associated with our cloud journey.

Turning to Page nine. Our capital levels and regulatory ratios remained strong in the quarter. We continue to operate at levels well above our required regulatory minimums. Our common equity Tier one ratio under the standardized approach increased by 50 basis points on a linked quarter basis to 12.9% driven by capital accretion and a decline in RWA. Our Tier one leverage ratio was 8%, down 10 basis points from the prior quarter.

At quarter end, our unrealized pretax loss on available for sale securities was $527,000,000 and we returned $435,000,000 to common shareholders in the quarter through cash dividends of $148,000,000 and common stock repurchases of $287,000,000 reflecting a payout ratio of 116%. Turning to our guidance, starting with expenses. We continue to expect our total operating expense growth to be below 5% for the full year, excluding notable items in both periods. Turning to NII, given our first quarter outperformance coupled with recent deposit growth, we're raising our full year guidance from low single digit growth to low to mid single digit growth. This assumes continued strong deposit levels, stable deposit mix, meaning we wouldn't expect absolute levels of NIB to move materially from current levels, but the percentage overall mix could change, market implied forward curves as of this week and relatively stable deposit pricing.

And with that, operator, please open the line for questions.

Thank And our first question is going to come from Steven Chubak from Wolfe Research. Please go ahead.

Hi, good morning, and thanks so much for taking my questions.

So the wanted to start on a question on the deposit beta. Certainly, the NII guidance and the modest, upward revision is certainly encouraging. The cumulative beta of 86 so far this easing cycle, it certainly surprised positively, especially relative to the 72% beta we saw during the period of Fed tightening. I was hoping you could speak to what deposit beta assumption is underpinning that guidance. Just trying to gauge what sort of deposit betas we can underwrite sustainably if we get four additional cuts consistent with the forward curve.

Yeah. Our deposit betas have remained relatively stable if you look historically. But what I would say that it's obviously gonna be higher for the institutional business, closer to 100 and then lower for wealth, 60% to 70% roughly. I will also point out though that we have spent a lot of time on our deposit pricing. I mentioned this in the last earnings call and thinking a little bit about tiering and the size of our deposits, where we get our deposits.

So I think having spent more time doing that, I think it's really it's benefited the deposit base on the positive side.

That's great. And for my follow-up, on the fee outlook and the impact on expenses, just given you're going to have to absorb some of the negative marks related to month and quarter lag pricing, both in the servicing side as well as in the wealth business. Dave, it sounds like you were reaffirming the 5% or better expense guide, but wanted to better understand how much flex you have if those fee pressures intensify and we don't necessarily see a inflection or recovery in equity markets over the course of the year?

Yeah. Yeah. We we are dedicated to keeping that expense growth rate below 5%. I'd point out that at the beginning of the year as we were doing our planning, we spent a lot of time identifying discretionary and nondiscretionary spending. So we know exactly what we have to do to flex.

And I think you also heard me say in the previous call that we're trying to build a more flexible business model that can basically, you know, adjust itself as market conditions either get better or get worse. Right? So we know where we have to do it. We know what our our levers are. They're gonna be, you know, obviously in the in the consulting side, outside services, technology spend and then potentially even on incentives as well.

So we've got a management team, I think, that's really driving towards having strong positive operating leverage through all the cycles. And that's why I'm willing to say we're going obviously stay within that below 5%. Currency creates a bit of a headwind for us. From my perspective, it's neutral in the sense that it helps us on the revenue side and hurts us on the expense side. And that's obviously going be something we have to manage more proactively.

But at the end of the day, we don't control it. And we're still based on the current exchange rates, we still think we can get to that 5% or below.

our next caller is Betsy Graseck from Morgan Stanley.

Hi. Good morning. Mike, during your prepared remarks, you mentioned that you had some capital markets activity that was pretty hot towards the end of the quarter, and then it bled into April. Could you talk a little bit about what type of capital markets activity you're referring to there? Has it continued in, you know, into April, meaning now?

Sure. So the level of volatility in the markets obviously has different impacts. One of them is that in general, it does tend to drive more what we would consider capital markets activity for us, which would be foreign exchange and then also brokerage. And in particular, I would say within that is our integrated trading services, where, you know, we are essentially the outsourced trading desk for, asset manager clients. And so as they see, you know, repositioning happening, in their portfolios, that's something that flows through to us.

So, it it was a little bit, as I was saying, in the first quarter, and more just the momentum, that's carried into to April here, and we'll see where it goes from there.

Okay. Got it. And then follow-up question is on the family office solutions, which launched this quarter. Is that right? Did I get that right?

Okay. So can you talk a little bit about your plans for this new what should we call it? Sleeve offering segment? I mean, I you've long had this capability set, but by putting it together in this way, it'd be helpful to understand what how you see the drivers from here in terms of rebranding within your current client set versus attracting new customers? And is this something that you would be taking beyond The US?

Sure. And and you have it right there, Betsy, as to to how we're looking at this, which is from a capability perspective, we have family office office capabilities as part of our global family office business and have been very successful in serving clients and and growing the business on that front. And then from a segment perspective, the ultra high net worth segment, so think about a hundred million and above, we've also been very successful in in serving that segment of clients. And what what this is about is trying to deliver that capability set, of family office services to the ultra high net worth segment. So right now, for an ultra high net worth client, for the most part, we're we're providing a very bespoke service offering to them.

They're surrounded, and it's a high level of service, for that client base. And yet we have clients in that segment that are looking to outsource more of more of those, activities, you know, to us, and it's a broader set. So beyond what you would think about as far as traditional wealth advisory, trust, fiduciary, banking, you know, they're also looking for a more robust reporting capability. They're looking for outsourced bill payment. They're looking for more of an OCIO type investment service.

So it's those capabilities that we're already providing to family offices just being able to do it on an outsourced basis, for ultra high net worth clients. And to your point, this is both, the opportunity to improve or enhance the service to existing ultra high net worth clients, but absolutely, an ability for us to grow that base of clients with these services.

And our next caller is gonna be Ken Houston from Autonomous Research. Please go ahead.

Hey, guys. Good morning. Nice to see the the little incremental buyback. Just wondering and now even with the even higher CET1 ratio at 12.9%, I know you had previously talked about doing greater than the 78% total capital return you did last year. Can you talk about your comfort with that?

Or just given the environment and where capital still is going, could you still move that up forward more and get more back to shareholders?

So I'll take a crack at that. Know we love our flexibility, and it's hard in a point in time to know exactly where you're going to land. Particularly in uncertain markets, you wanna make sure you're there for your clients. And so it trended up this quarter. There's obviously some room to to to take it down.

And I will remind you that we did pay out a 16% of earnings, which is an insignificant versus the 90% we did in in q one. So, I I know, our range is 11 to 12% on CET1, and that that hasn't changed. We do watch our capital levels compared to our peers. You know? And so we we like the the higher payout levels.

I think going forward of around a % could be something that we could we could aim more towards going forward.

Makes sense. Great. And a follow-up on the expense side. So expenses to trust fees, calculating around $1.18, about flat year over year. I know you have the long term goal, one zero five, one 10.

And I know there's a direction of travel that you're aspiring for, but given Steven's prior comments about the market headwinds that you're facing, do you expect to see directional improvement there as we move forward? And I guess there's a push and pull with, as you already mentioned, you're trying to get the expense growth rate lower. So just how do we just think about that? Thanks.

Yeah. Well, there's obviously two components to that ratio. You know, in in the trust fee environment right now, given what's happening in the capital markets, is gonna be something that we, again, we don't control. What I what I try to focus people on is organic, you know, organic trust fee growth and organic expenses. Those are the only things that we really have pretty much complete control over.

So what we try to do is drive those down as much as we possibly can, and then we have to just confront whatever market environment that we have at the time. And there's certain things that that are gonna sort of we're just gonna have to accept them. So the more we drive down the organic side and drive up the trust fees, then we're gonna be in better shape. So that that's sort of how we think about it. And then it all ends up being in the expenses of trust fees, but again, that doesn't that that includes all the market gyrations that are in there as well.

And clearly, our targets are are are much lower than where we currently are.

And our next question is gonna come from Mike Mayo from Wells Fargo Securities. Please go ahead.

Hi. Just some clarification on your other answers. So Family Office Solutions, you have Global Family Office. That's one fifth of your wealth revenues. So family office solutions, what do you imagine as the total addressable market?

How much of that of your current family office revenues is that today? What geographies are you targeting? Are you hiring people for that? Because it seems like you certainly talk a lot about this, especially relative to its side in terms of revenue contribution. So I'd you could just flesh that out a little bit more.

far as the the addressable market, you know, the ultra high net worth market, very large. And if if you look at just our client base, the number of clients that would fall into this category is is in the hundreds, kinda three to 400 existing clients that would fit this profile. I don't I don't have, I'll say, a percentage of revenue number for you on that front. And so it's already a large client base for us. It's just one that we think with the growth, in that market and our brand in that market and our capabilities, it's one that we can both grow with the market but also, take share in doing that.

And then to your point on on hiring people, absolutely are adding resources, to this. It it is a different model, than what we've had where, in this case here, as I mentioned, it's like an outsourced, family office capability. And so the primary interface for those clients is essentially the, you know, the quarterback for that relationship. So in a family office situation, you know, that that person is, you know, an employee, if you will, of the family, who's directing all that activity. In this case here, that's a Northern Trust employee who is the the quarterback or the director of all of those activities.

We absolutely have people that do that now, but as we're growing this business, we are adding additional talent to to be able to continue to resource the growth there. And then I would just also add to it, there are also technology capabilities that are a part of this. So, you know, for the family office business, that's all delivered, you know, through a comprehensive technology platform, if you will, where we act as, you know, essentially the overall integrator of the various types of technology for a family office. And in this case here, you know, to be able to provide that on a more a la carte basis, if you will, for the ultra ultra high net worth clients, There's some technology build that we're investing in as well.

So Family Office Solutions, Northern would kinda be the the CFO on behalf of the family as opposed to the existing family office. Okay. Got it. And the other question relates to, relates to the question, about capital. I mean, you have so much CET one.

It went up so much more again. You're so far above your minimum. On the one hand, I I think a lot of your stakeholders, you know, like that. You survived the Great Depression. You're one of two big banks that didn't cut the dividend during the global financial crisis.

You like that perception of trust and resiliency. You know, I get it. On the other hand, it's hard to know where that line is between having enough for that resiliency and having so much that you have some trapped capital. So, you know, what are your thoughts about, you know, acquisitions or accelerating the buyback? I know that's already come up.

Or and what kind of deregulatory benefits are that you could potentially get under the new regime? Sure.

So your preamble there, Mike, covered a lot of the things that I would start with as well. So all that said, we are in a very good position from a capital perspective. To the extent that we thought that there was something inorganic that we could do, which would be a good deployment of that capital, we we would consider it. I would say at this point, that's not a priority on that front. That's why we are in a position to do higher repurchases.

As Dave mentioned, in the quarter, we were over 100%. All else equal, as we go forward here, we think that % is the right level to think about. And to your point, as far as any changes in the capital regime, you know, we'll start with what we think is is the necessary amount of capital, but we've also talked previously about the the importance of being, you know, at or above the level of some of our peers. So to the extent that it changes within the industry, you know, that that changes that constraint, if you will, as well and gives us even more flexibility to do things like that.

our next question is going to come from Ebrahim Poonawala from Bank of America.

to follow-up, I guess, Dave, on the expense front. I think if you go back when you took took over as CFO, we had the sort of leadership changes. You talked about the focus in terms of creating a COO role and the focus on vendor contracts, on just moving business heads to manage some of these things. Just give us a sense of any proof points on what you achieved or seen so far. I know it's early days, but as we think about the expense flex and the operating leverage in the business that may come through over the next year or two, it would help us inform how much we can rely on expense flex.

So I would love to hear things that have been achieved in the last sort of six, seven months since these changes occurred. And and and what's the runway here in terms of what inning are we in in terms of identifying productivity opportunities? Thank you.

Sure. And I think that's a a good framework to think about it. Dave mentioned, you know, a number of things that we have been doing, and that you're asking about the time frames in front of us. So, you know, on that front, again, we've been very focused on making sure that we have an efficient workforce, and that has produced efficiencies for us in the most recent periods. Of course, we'll continue to do that.

There's still more opportunities to look at the way that we're organized, spans of control, location strategy, a number of initiatives across that front that will that will continue to deliver productivity for us. We're also, in the earlier stages of continuing to deploy, I'll say technology, and I say that in the sense of, you know, technologies that have been available like machine learning, natural language processing that we're able to deploy to create efficiencies and productivity, and then in the earlier stages of generative AI. So areas where we're using GitHub, for example, for IT or software development automation, which, again, we're we're getting, I'll say, very good results on that front, but it's in the very early days of deploying that. And also looking to deploy more for digitization of all the documentation that we utilize and have to process for our clients. And and along those lines, if you think about a lot of the activities in the asset servicing business in our operations that relate to workflow management, That's something where we're deploying the technology to continue to automate that much more.

And then to your point of even beyond that, we've talked about the fact that we we've reorganized, but that's that's only part of it when we think about the COO organization that's been set up. It's also a change in our operating model where we're moving towards a a more capability driven operating model. That's where we're taking common services or activities or processes that cut across the company and looking to centralize, standardize, and automate those processes. So thinking about client onboarding, which happens across the company, or portfolio accounting, and those capabilities. And also our our client, platforms or portals, you know, our passports where we have multiple passports to the extent that we can standardize those across the various businesses, geographies, that creates those longer term productivity and efficiency opportunities.

So a number of things that we're doing now, but much more that we can do as we go forward to ensure we're getting consistent productivity.

That's good color, Mike. Thanks for talking through that. And maybe one, Dave, heard your guidance on NII. Just remind us in terms of sensitivity to rate cuts, how we should think about that going forward, rapid rate cuts. Is that a negative?

How you think how how are you just going about managing the balance sheet from an ALCO perspective? Thank you.

Yeah. We have, you know, in our model, we've got two or three rate cuts potentially in there. From our perspective, it doesn't really impact it all that much, to be honest with you. The NIM compression really doesn't start until we get much, much lower rates. And if you want to think about it, roughly speaking, a 25 basis point rate cut, it translates into less than than a $1,000,000 a month for us.

So so it isn't it isn't something that we we we anticipated, but this is something that's gonna prevent us from hitting our goal.

our next question is going to come from Glenn Schorr from Evercore.

Hi. Thanks. Talk about, some of the alternative good morning. Maybe talk about some of the alternative initiatives you have in motion. Let's talk maybe asset and wealth management first.

In terms of delivering a more complete set of solutions, I'm I'm curious if you get what you could tell us and what's in motion in terms of both proprietary and third party product that you might be onboarding, what signposts we might be looking to see throughout this year. Appreciate it.

Sure. Absolutely. So, alternative, solutions, definitely, important growth initiative for us across the company. To to your question as it relates to wealth management, what we're looking to do there, Glenn, is to enhance and expand the opportunity set, for our clients. And it is a combination of both, know, proprietary but also third party funds.

So, fifty South Capital, is our, alternatives, investment manager within NTAAM. And on that front, you know, we've we've been very successful with our wealth clients in raising funds over time, combination of fund to funds, but also other types of, I'll say, direct capabilities such as secondaries and co investments. And we look to, this year, essentially double the fundraising capacity or actual fundraising amount to what we've done in previous years on average. And then on the other hand, we have our our wealth management alternatives platform, which has third party funds on that. And that's an area where, likewise, we're looking to increase the number of funds this year that we offer to our clients and also look to potentially increase the size of the average offering on that front.

You know, that does require an investment. So that's why when you say, you know, what's happening on that front, there's a lot happening to ensure that we do that in a way that gets the right outcomes, for our clients, ensuring that, we provide the right education around alternatives and how it fits into the the portfolio, of our clients. And so, yes, big area of focus for us both on our own, I'll say, and through third parties.

Northern Trust (NTRS) Q1 2025 Earnings Call Transcript

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