US financial giant Northern Trust could be on the hook for losses related to the unravelling of a star UK fund manager, in a case that is drawing attention to the dangers of hard-to-sell assets hiding inside retail investment products.
The Chicago-based bank lent £150m ($190m) to a fund managed by Neil Woodford, whose investment empire is in serious trouble as clients have fled and UK regulators have launched an investigation. The Northern Trust loan is backed mainly by private shares in risky young companies. The loans were disclosed in fund documents.
