Bridgewater Associates Launches Industry First Dual-Party Outsourcing Model

WESTPORT, Conn., Aug. 3, 2016 /PRNewswire/ -- Bridgewater Associates, one of the world's leading investment management firms, today announced it has launched the latest phase of the industry's first comprehensive dual-party middle and back office outsourcing model. The unique system introduces the concept of a "double do," where key processes are executed independently by two service providers, BNY Mellon and Northern Trust. The results are reviewed and reconciled between the providers. These efforts reduce the possibility of error by embedding independent verification checks into the key processes, while simultaneously providing back-ups in the event a system, person, or process fails.

"We constantly strive for a higher standard across our business and the launch of this new phase underscores that approach," said Eileen Murray, co-CEO of Bridgewater Associates. "It will provide us with accounting, operational, and regulatory efficiencies and allow us exceptional operational resiliency between the primary and secondary processors. Equally important, both outsourcers have a full set of reconciled records, giving Bridgewater the flexibility to leverage data from either for many of our business needs. It is a unique system and an industry first that we believe will be well received by our clients and the industry."

As the primary processor, BNY Mellon will operate the middle and back office services, conduct street-side settlements and manage Bridgewater's official books and records. Northern Trust, will receive the same information as BNY Mellon, and then independently process and record the transactions, fully negating the need for an internal team to shadow the primary service provider. Additionally, Bridgewater will retain a small quality control team to monitor the dual-party model and maintain the firm's long-established standards of excellence. By reconciling records along multiple parameters and resolving intra-day breaks with the primary processor, this system is designed to exceed the typical industry "shadow" model and to provide Bridgewater with best-in-class assurance for its funds and its investors. 

"This unique dual-party outsourcing model enables Bridgewater to concentrate on its core strengths of asset management, product innovation and client service," said Samir Pandiri, Chief Executive Officer of Asset Servicing at BNY Mellon. "The growing complexity of middle and back office functions and rising technology costs are driving the need for more efficient information delivery and data management platforms. BNY Mellon's OnCore platform is designed to help Bridgewater more efficiently access investment-related information while retaining oversight and control."

"The dual outsourcer model is a differentiator in the industry," said Michael O'Grady, President, Corporate and Institutional Services at Northern Trust. "We believe the increased oversight and quality assurance over hundreds of reconciliations and reports across thousands of attributes provides greater safeguards and increased flexibility that will have a meaningful, long-term and positive impact for Bridgewater and its investors."

"This new initiative is part of our efforts to ensure we have the strongest operational processes possible," Eileen Murray added. "Utilizing state-of-the-art support platforms that are robust, easily customized and global, this dual-party model provides such benefits as greater investment flexibility, improved risk mitigation, and unprecedented independence, enhancing our processes and the service our investors receive."

About Bridgewater

Bridgewater Associates is a global leader in institutional portfolio management with approximately $150 billion in assets under management. Bridgewater serves a wide array of institutional clients worldwide, including public and corporate pension funds, foreign governments and central banks, university endowments and charitable foundations. Bridgewater began investment operations in 1975, and throughout its 40-year history, has been recognized as an industry innovator and a top-performing manager. It was the first firm to manage currency overlay strategies, the first U.S. manager of global inflation-indexed bonds, a pioneer in separating alpha from beta, and an advisor to the U.S. government on the creation of Treasury Inflation-Protected Securities. The firm has received over 70 industry awards and various recognitions in the past 10 years; including awards for industry innovation, performance, quality of research, client service and client satisfaction, quality of operations and operational infrastructure, and being named a top workplace.

About Northern Trust

Northern Trust Corporation NTRS is a leading provider of wealth management, asset servicing, asset management and banking to corporations, institutions, and affluent families and individuals. Founded in Chicago in 1889, Northern Trust has offices in the United States in 19 states and Washington, D.C., and 22 international locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of June 30, 2016, Northern Trust had assets under custody of US$6.4 trillion, and assets under management of US$906 billion. For more than 125 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Visit northerntrust.com or follow us on Twitter @NorthernTrust.

Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Global legal and regulatory information can be found at https://www.northerntrust.com/disclosures.

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SOURCE Bridgewater Associates