Pete Cherecwich

As the recipient of Global Custodian’s Industry Legend award in November 2022, Northern Trust stalwart Pete Cherecwich sat down with Global Custodian to discuss his personal motivations, views for the future of the business and how his career nearly took a very different turn, in an end-to-end insight of a competitive individual’s journey in asset servicing.
Inducted: 2022

Pete Cherecwich is a self-confessed ‘sports nut’. This much he admitted in a recent LinkedIn post where he documented his trip to the Qatar World Cup, and his admiration for the likes of Messi, Pele and other legends of the game (though c’mon Pete, it’s called football, not soccer). 

When you couple this with his career achievements, the trajectory of the businesses he’s managed at Northern Trust and his plans for the future of the business, what he revealed to me during his GC Legends interview also won’t come as a surprise.

“I am as competitive as they get. I love to win,” he says. “So a good day at work is winning, and that can be getting a new deal or it can be the system that we invested in working and we get exactly what we thought we were going to achieve from it. 

“Part of the reason to join Northern Trust was that there was an opportunity to take its dominance in the asset owner space and add the asset manager space to it. And I’ve just kept going. I went from product to fund services and then just kept going up and for the last five or six years now I’ve been head of asset servicing.” 

Cherecwich has spearheaded Northern Trust’s fund services business to become one of the most prized divisions overall asset servicing unit, while also standing at the forefront of technological developments in the industry. His addition into Global Custodian’s Hall of Fame adds to the inclusion in our 30 People to Shape the Future list and an Industry Person of the Year award. Much like some of his beloved sporting idols, he relishes the underdog mentality and punching above his weight.

“When RFPs come out, we are always there,” he explains. “And one thing to say is people talk about size and scale, and while we might not be as big as some of the others in the industry, we have scale. Size doesn’t equal scale, and our scale and our ability to take on larger clients and use the same platforms enables us to compete at the highest levels of this industry.” 

Cherecwich has overseen a range of achievements within the organisation from products to partnerships, and in recent years we’ve seen the bank throw its weight behind initiatives like digital asset joint venture Zodia, technological platform overhaul Matrix and end-to-end service Whole Office. 

Following the trend of front-to-back solutions, the latter offering was the Chicago-headquartered custodian’s answer to offering front-office trend among asset servicing providers, which Cherecwich sees as the third wave of outsourcing. 

“If you had fund accounting as the first wave, middle-office as the second wave, now people are looking at the front-office,” he adds. “A lot of people always used to think the trader had to sit next to them. Well, Covid hit and the trader was five towns over, they realised that maybe Northern could do their trading. That’s a big deal.  

“I’ll tell you what I presented to the board regarding where we’re focused right now, and where we think the new things are coming. Number one is our capital markets business. If I look at where we were years ago, capital markets was more of trading desks that were on top of the custody business. Now we’re turning that into a full-fledged separate business. 

Cherecwich outlines three products he’s excited about for the future under the capital markets unit: ITS (integrated trading solutions), Total Portfolio Optimisation (TPO) and Total Portfolio View (TPV). It’s no surprise to me that he’s name-checking the front-office capabilities to me – despite our publication’s coverage areas being more focused around the middle- and back-office – because this seems to be the direction of travel for many large asset servicers. The morning of the interview BNY Mellon launched its own offering, to go along with the likes of Northern, BNP Paribas, Societe Generale, to name a few, which have either outsourced dealing or execution desks. 

“As organisations look at their cost models, they ask ‘am I really getting alpha from trading alright ourselves?’ or ‘can I get the same type of commission, the funds are the same, but lose all the cost of the traders and the systems by outsourcing that trading to Northern who can do it for us?’,” he says, clearly passionate about the trend. 

On TPO he says: “We believe that we can build the rails – for lack of a better word – that sophisticated investors can optimise their total portfolio, earn an additional 20 basis points on that within a risk budget that their organisation gives them.” 

On TPV he notes: “That’s the sort of the nirvana that has not been seen in the marketplace that we have now created and are pitching that so we’re excited about providing the asset owner community that particular service.”

While it’s interesting to look to the future, our Hall of Fame profiles are as much about the individual’s background and beginnings. Cherewich began his career at State Street, and among the standout moments of his time there was helping create their middle-office business, and a four-year stint in Japan. 

“That really changed me,” he says about working in Japan. “Not only being responsible for all the trust and custody business, but being the chief operating officer at the time for their capital markets and their asset management business. That gave me a broad experience of being alone in the country, running it, and then all of the business lines that really helped shape me as an individual.

On a more personal note, he adds: “If people think they understand the culture because they’ve been there: they’re wrong. After spending four years living in a country, what I realised is that I’ll never really understand everything about the culture and frankly, just knowing that you don’t know, actually changes you everywhere you go because the arrogance goes away. You say ‘OK, I’m a visitor here. I need to listen. I need to observe and not try to understand’.” 

Given his achievements and prominence in the global asset servicing industry, it’s worth noting that Cherecwich’s life nearly took a different turn when he was deciding on his very first job. 

“I had two job offers when I graduated college. One was to be a portfolio administrator at State Street Bank and I thought ‘oh working at a bank, that sounds cool’ and the other was at an office supply store in their new management training programme. Now I didn’t want to do retail, but, that company turned out to be Staples and that they only had one store at the time. You can decide whether I made the right decision or not.”

Cherecwich’s decision to opt for securities over stationary led him down a path of success akin to some of his footballing heroes where the ultimate goal saw him winning – just as he desired – at a team sport, on the biggest of stages.