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BNY merges boutiques into $560bn powerhouse

BNY merges boutiques into $560bn powerhouse

BNY Mellon Investment Management (BNY Mellon IM) is to combine its three largest boutique managers to create a new unit with $560 billion (£427 billion) in assets. 

BNY has set out plans to merge Mellon Capital Management (MCM), Standish Mellon Asset Management (Standish), and The Boston Company Asset Management (TBCAM) in a move that will create a new asset manager that will rank as one of the 50 largest in the world. 

The combined business will aim to offer institutional and intermediary clients single and multi-asset investment strategies in both active and passive solutions.

The new business will be headquartered in Boston and led by chair and chief executive Des Mac Intyre (pictured above), who is currently chief executive of US asset management at BNY Mellon IM. 

Mac Intyre most recently served as head of investment process oversight at the world's largest hedge fund Bridgewater Associates, from March 2016 to April 2017. 

Previously, from 2005 to 2015 he served as the chairman and chief executive of Standish. With more than three decades of  industry experience, he also served in roles including chief operating officer at Pareto Partners and head of risk and treasurer for GM Asset Management. He rejoined BNY in June this year. 

Three into one

The three existing businesses each come with specialised investment strategies. MCM uses a systematic process to deliver equity and fixed income index and factor-based smart beta strategies, as well as multi-asset products.

Standish focuses on a fundamental, active fixed income with expertise in fixed income in both developed and emerging markets, US municipal bonds and US short duration bonds.

TBCAM is an active equity manager specialising in value, growth and core styles as well as opportunistic and long/short alternative equity strategies.

Chief investment officers from each of the three managers MCM, Standish and TBCAM will be appointed within the new business, these are:

  • Jeff Zhang from MCM for multi-asset, index and smart beta;
  • Dave Leduc from Standish for active fixed income;
  • Dave Daglio from TBCAM for active equity. 

The combination of the three businesses is expected to be completed within 12 months. During this transition period, MCM, Standish and TBCAM will maintain their existing product brands until the launch of a unified brand later in 2018. 

'Each business already has in-depth investment expertise in their respective areas. By combining them we will be able to increase our investment in their collective capabilities and add new investment solutions for the benefit of clients,' said Intyre.

'This news is about enhancing a multi-boutique model for our clients. The combined will still operate as a boutique alongside our other specialist managers,' said Mitchell Harris, chief executive of BNY Mellon IM.

'The combined resources of this new entity will create greater scale to better address what clients are looking for in distribution and marketing, optimized operations, advanced technology and risk management while also allowing us to reinvest in client servicing and support for our investment teams, as well as creating an enriching and rewarding environment for our people.'

Moving parts 

In September, BNY Mellon Investment Management announced that it would sell its $9 billion real assets boutique CenterSquare Investment Management to the firm's management team and private equity firm Lovell Minnick Partners.

The transaction was aimed at streamlining BNY's portfolio of asset managers so it has a focused set of specialist investment solutions for clients, according to Harris.

After the sell-off of the real asset boutique and today's merger, BNY has 10 remaining affiliate boutiques

BNY Mellon IM, which encompasses BNY Mellon's affiliated investment management firms, wealth management services and global distribution companies has $1.8 trillion in assets under management.

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