Northern Trust Buys Omnium Technology Development from Citadel

Northern Trust bought Omnium, Citadel’s hedge fund administration business, from the electronic trading giant in 2011. At the time, it licensed the middle- and back-office technology at the firm—which is now called Northern Trust Hedge Fund Services—from Citadel, but it did not bring the development team or software rights in-house.

Peter Cherecwich, president of Northern Trust Corporate and Institutional Services, says the Omnium technology team has been critical to the success of Northern Trust Hedge Fund Services over the years.

“We are excited to have the opportunity to bring this technology development team to Northern Trust,” Cherecwich says. “We have partnered closely with the Citadel technology development team to accomplish the growth that we’ve achieved in hedge fund services since the Omnium acquisition in 2011. Their deep expertise has been a key contributor to our growth, and has been critical to our success in delivering solutions to our clients – who are among the world’s most sophisticated asset managers and institutional investors.”

The deal is expected to close within the first half of the year. Financial terms were not disclosed.

Northern Trust Hedge Fund Services is one of the world’s largest hedge fund administrators, with more than $350 billion in assets under management across 130 clients. The bank said it will continue to provide fund administration services to Citadel.

Gerald Beeson, chief operating officer at Citadel, said in a statement that the agreement lets both firms focus on their core strengths.

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

Northern Trust and Citadel did not provide additional comment in time for publication.