Bank of New York Mellon Seeks Asset Management Acquisitions

Published: 08-Jun-2009

With ample capital in its balance sheet, Bank of New York Mellon (BNYM) is looking to expand its $880 billion asset-management business through acquisitions.

With about $19.5 trillion in custody assets to oversee, BNYM is the largest custody bank in the world. Its last fund purchase was ARX Capital Management of Rio de Janeiro in November 2007. Regulators had found that the bank had adequate capital to survive a deep recession and is among the first of the 19 largest banks capable of paying back the $3 billion taken from the Troubled Asset Relief Program.

Robert Kelly, CEO of Bank of New York Mellon, said: “What we’re interested in is products that we don’t have today. We’re very big in the active space. NYMC has a multi-boutique model, where asset- management units have their own executives, portfolio managers, traders and analysts. Money-management units owned by BNY Mellon include Dreyfus, which is focused on actively managed mutual funds, and Standish Mellon Asset Management, which specializes in bond investments for institutions.” 

However, Mr. Kelly declined to comment on whether the bank is pursuing a transaction for Barclays’ Global Investors fund unit, which oversees $1.5 trillion of assets. BlackRock is the other bidder interested in it.

Mark Fitzgibbon, an Analyst at Sandler O’Neill LP in New York, said: “Custody banks handle recordkeeping, securities lending and administrative work for institutional investors including pension plans and mutual funds. Many of those customers also need investment-management services, and selling funds helps BNY Mellon compete with rivals such as Boston-based State Street Corp.”

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