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Corporate Moves

Northern Trust Signs Deal in Singapore to Work On Tokenizing Green Assets

The agreement with the National University of Singapore aims to support sustainable investing and blockchain technology.

By Michael Katz




Northern Trust Corp. and the National University of Singapore have signed a three-year memorandum of understanding as part of a collaboration they said will focus on supporting sustainable finance frameworks and improving blockchain technology.

The $1.6 trillion asset manager said the partnership aims to create a framework for “tokenizing green assets” to help investors improve their ability to verify environmental, social and governance claims and meet regulatory requirements calling for increased disclosure. Tokenizing green assets involves converting sustainable investments, such as carbon credits and investments in renewable energy projects, into digital tokens on a blockchain.

Yuval Rooz, CEO of blockchain software provider Digital Asset, wrote in a recent commentary for the World Economic Forum that the tokenization of financial assets on the blockchain is gaining momentum at the institutional and governmental level.

“After years of investment, proof of concept, and testing, the planets are aligning and tokenization of financial assets is finally happening at an institutional and governmental level,” Rooz wrote. “This shift will forever change the way that nations trade and promote more inclusive financial participation.”

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According to Rooz, the main reasons tokenizing assets has generated so much interest from major institutional investors include reducing operational costs, improving efficiencies and eliminating settlement risks.

“Industry collaboration is crucial to mobilizing tokenized assets and connecting across participants and global markets,” Rooz said, “Technology developments in financial markets have always moved more cautiously than other industries.”

According to the announcement, a main part of the partnership is a tokenization initiative that uses Northern Trust’s Matrix Zenith platform, intended to tokenize “green credentials” on the blockchain.

“This collaboration with NUS represents a significant step forward in our efforts to harness blockchain technology for the betterment of sustainable finance,” said Justin Chapman, Northern Trust’s global head of digital assets and financial markets, in a statement. “By bringing the green credentials of bonds on-chain, we are addressing investors’ need for transparency and reporting in a fast-evolving market.”

Northern Trust has been increasing its activity in Singapore in recent months. In August, the company named Kai Jebens, who will be based in Singapore, as head of client development for southeast Asia. It also named Chris Vera as a senior digital solutions consultant for Asia Pacific in Northern Trust’s asset servicing business. In May, Northern Trust was named the outsourced trading provider for Singapore-based investment manager New Silk Road Investment.

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Home > News > Asset Allocation > Funds Are ‘Getting Back to Basics,’ Refocusing on Long-Term Returns
Asset Allocation

Funds Are ‘Getting Back to Basics,’ Refocusing on Long-Term Returns

Pension and sovereign wealth funds are prioritizing returns over liquidity, according to the OMFIF’s annual review.

By Andrew McKean




Global public pension funds and sovereign funds are refocusing on generating long-term returns, generally targeting opportunities in private markets, emerging markets and green assets, according to the Official Monetary and Financial Institutions Forum “Global Public Funds 2024” report.

Based on discussions with 28 global public pension and sovereign funds with more than $6.5 trillion in assets under management, the report—“New Horizons: Funds refocus on investments for the long term”—found that in 2022 and 2023, nearly half of the funds surveyed cited inflation as their primary macroeconomic concern.

With price pressures now easing, these funds are shifting focus to the long-term drivers of economic and market outcomes, with close to 60% identifying technological change or equilibrium real interest rates as the key factors shaping their five- and 10-year investment strategies.

Global public funds were also found to be prioritizing returns over liquidity by increasing their allocation to private markets. For the third consecutive year, infrastructure remained the most sought-after asset, with nearly 60% of respondents aiming to increase allocations, while more than 40% plan to shift toward private credit or private equity in the next year or two.

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One-quarter of surveyed funds, meanwhile, plan to reduce cash holdings, which the report stated reflects a growing appetite for risk. More than 40% reported plans to increase allocations to public equities, while just 8% plan to boost government bond holdings, and none aim to raise corporate bond allocations in the next two years.

Many public pension and sovereign funds also reported plans to increase allocations to private markets and real assets within their sustainable portfolios, aiming to “influence the real-world transition.” Most respondents representing funds (56%) think they can make the biggest impact on transition finance via private equity, compared with 25% through public equity.

Separately, the majority (58%) of respondents now view India as the most attractive emerging market, up from 38% last year, driven by strong macroeconomic fundamentals and a favorable regulatory environment. Notably, large funds like the Korea Investment Corp. and the Abu Dhabi Investment Authority have established a local presence in India this year.

In contrast, no funds selected China, down from 23% last year, as geopolitical risks and economic challenges have led many funds to reduce their investments there.

“Geopolitics continues to have a major bearing on how they view their investments,” wrote Clive Horwood, managing editor and deputy CEO of OMFIF, in the report’s forward. “Concerns about the impact of tariffs and protectionism loom large.”

This article appeared in our sister publication, Financial Standard, which, like CIO, is owned by ISS STOXX.

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