Mellon Financial Corp. today agreed to buy Walter Scott & Partners, an Edinburgh-based global and international equity manager. Terms were not disclosed. The firm will operate as an independent Mellon subsidiary and will retain its name. The acquisition will add £14.3 billion ($27 billion) to Mellon's overall assets under management, raising its total to $880 billion. The transaction is part of Mellon's plan to expand its overseas investment strategies to meet increasing demand, according to a news release from Mellon. In the last decade, Mellon's non-U.S. client assets under management have grown to more than $100 billion from about $2 billion, the release said.
"The rationale for this is quite strategic in nature," Ronald P. O'Hanley, Mellon vice chairman and president of Mellon Asset Management, said in a telephone interview. "For us, this is a distinctive manager focusing on a buy-and-hold, large-cap-oriented strategy with very low turnover, and that's different from what we have. For Walter Scott, it is a high-quality investment manager facing what a lot of managers of this size are facing, and that's how to gain access to more distribution, client services and operational and technology support. In order to grow, it needs to invest in those functions or partner with somebody like us."
Walter Scott, who holds a doctorate in nuclear physics from Cambridge University, will remain chairman of the eponymous firm and report to Mr. O'Hanley.