BNY Mellon Investment Management is to combine its three largest US investment managers to create a specialist multi-asset group in 2018 with $560bn AUM.
The $1.8trn AUM asset manager, which operates a multi-boutique model, will merge US-based Mellon Capital Management (MCM), Standish Mellon Asset Management and The Boston Company Asset Management (TBCAM) in a move 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.
With over $560bn in AUM, the combined business will rank as a top 10 US institutional asset manager and a top 50 manager globally.
It will employ more than 300 investment professionals, with US offices in Boston, San Francisco and Pittsburgh, and investment staff through affiliates in London, Singapore and Hong Kong. The combined groupo will be headquartered in Boston.
This new business will offer institutional and intermediary clients single and multi-asset investment strategies in both active and passive solutions.
Mellon Capital Management uses a systematic process to deliver equity and fixed income index products and factor-based smart beta strategies, as well as multi-asset products. Meanwhile, Standish is a active fixed income bond manager and TBCAM is a research-driven active equity manager.
CEO of BNY Mellon Investment Management Mitchell Harris said in a statement that its clients "are increasingly looking for specialist managers with differentiated investment strategies and competitive pricing".
"This requires scale in risk management, technology and operations to deliver upon these needs.
"Today's investment environment is evolving rapidly, and BNY Mellon's multi-boutique model is well positioned to offer specialist active and passive solutions from our bench of leading investment managers".
The individual companies' investment teams, processes and philosophies for their core strategies will remain substantially the same following the merger, according to BNY Mellon IM.
But as the teams collaborate more closely, these processes will be enhanced via an operational infrastructure and the addition of new analytical tools and research capabilities.
The management teams at MCM, Standish, and TBCAM, with the support of BNY Mellon IM, will be leading the integration of the businesses and chief investment officers will be appointed from each boutique.
They include: Jeff Zhang from MCM for Multi-Asset, Index and Smart Beta; David Leduc from Standish for Active Fixed Income; David Daglio from TBCAM for Active Equity.
The new business will be led by chairman and CEO Des MacIntyre, currently CEO of US asset management at BNY Mellon IM. He most recently served as head of investment process oversight at Bridgewater Associates. Previously, he was chairman and chief executive officer of Standish.
In an environment where yields are so low, costs can make a huge difference to the outcome’
ETF market to hit $7.6trn by 2020
Responsible for fund selection
Closing in 2020
Focused on asset liquidity and credit quality