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Northern Trust to Acquire Citadel's Technology Platform

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Northern Trust Corporation (NTRS - Free Report) has entered into an agreement with Citadel to acquire its Omnium technology platform. The transaction, which is expected to be completed by the first half of 2018, will provide Northern Trust with greater control over technological enhancements.

Notably, the software development rights of the technology platform will also be acquired by Northern Trust.

Once the team of key development professionals from Citadel collaborate with Northern Trust’s operations professionals, they will together be able to come up with more innovative solutions for alternative fund managers, asset managers, institutional investors and family offices.  

Peter Cherecwich, president of Northern Trust Corporate & Institutional Services, said, “We are excited to have the opportunity to bring this technology development team to Northern Trust. Their deep expertise has been a key contributor to our growth, and has been critical to our success in delivering solutions to our clients – which are among the world’s most sophisticated asset managers and institutional investors.”

Earlier in 2011, Northern Trust had acquired the Omnium hedge fund administration business of Citadel. After the acquisition, the business began to be knows as Northern Trust Hedge Fund Services, which now provides services for hedge funds and large institutional investors and offers middle office and administration services, including trade processing, asset servicing, valuation and profit and loss reporting, cash and collateral management etc.

Northern Trust Hedge Fund Services has now become a company with more than $350 billion in assets under administration, growing from $70 billion in assets under administration when it had been acquired.

While entering into this new agreement with Northern Trust, Gerald Beeson, Chief Operating Officer of Citadel, said, “Citadel and Northern Trust have transformed the hedge fund administration industry through a combination of operational excellence and Citadel’s world-class technology. This change in our technology relationship with Northern Trust will enable each organization to better focus on their core strategies as both firms continue to experience significant growth.”

Northern Trust remains focused on initiating new businesses to tackle macroeconomic headwinds. It continues to benefit from its strong wealth management operations with diversified products.

Shares of the company have gained 14% in the past three months, outperforming 13.1% growth for the industry it belongs to.

Currently, the stock boasts a Zacks Rank #1 (Strong Buy).

A few top-ranked stocks in the same space are BB&T Corporation (BBT - Free Report) , Bank of America Corporation (BAC - Free Report) and Comerica Incorporated (CMA - Free Report) , each carrying a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

BB&T’s earnings estimate for 2018 has been revised 5.2% upward over the last 60 days. Also, its shares have gained 14.2% in a year’s time.

Bank of America’s 2018 earnings estimate has been revised nearly 8% upward over the last 60 days. Its shares have surged 33.2% in the last year.

Comerica’s earnings estimate for 2018 has been revised 9.2% upward over the last 60 days. Its share price has increased 32.3% in the last year.

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