Northern Trust has been selected by Reliance Trust, a US wealth management firm, as the global custodian for its $7.7 billion trust fund portfolio.
Under the mandate, Northern Trust will provide global custody, fund administration and fund accounting services for 21 collective investment trust (CIT) funds.
The deal marks a significant milestone for Northern Trust’s aim to grow its CIT fund services business in the US.
“Our platform is structured to offer fund managers an end-to-end solution that combines Reliance Trust’s expertise and scale as a trustee with Northern Trust’s global operations technology, financial strength and decades of experience supporting CITs and other fund structures,” said Dan Houlihan, head of asset servicing, Americas, Northern Trust.
CITs continue to grow in popularity as a fund structure for tax-exempt US retirement plans and other qualified investors. Because CITs are not sold directly to retail investors, they are subject to different regulatory oversight and typically have a lower cost structure than mutual funds.
Northern Trust’s CIT business grew by approximately 41 percent in assets under administration during the 12 months ending 30 June 30 2018.