BNY Mellon Asset Management acquired a 20% minority interest in Siguler Guff, a New York-based multistrategy private equity firm with roughly $8 billion in assets under management and committed capital.
Terms weren't disclosed.
The deal gives multiboutique giant BNY Mellon its first stake in a private equity firm, confirmed BNY Mellon spokesman Mike Dunn.
In an interview, Ronald P. O'Hanley, BNY Mellon's president and CEO, said the deal follows two years of studying what role, if any, his firm could play in private equity.
While his team quickly concluded that opportunities to add value weren't good in large-cap, developed market private equity, where returns often depend on extensive use of leverage, they felt a manager such as Siguler Guff, focused on emerging markets, where BNY Mellon is already strong in public debt and equities, could be a “terrific complement.”
The two companies in January formed a strategic alliance in which BNY Mellon would distribute Siguler Guff's products and services globally; also, Siguler Guff in May took over management of a WestLB Mellon Asset Management private equity fund of funds.
Mr. O'Hanley said his firm's 20% stake in Siguler Guff provides the alignment of incentives to further build on that relationship, with both firms eager to work together in areas where BNY Mellon is enjoying strong growth, such as crafting “customized investment solutions” for sophisticated institutional clients as well as retail clients, particularly in Asia.
Siguler Guff offers both fund of funds focused on distressed security investing, emerging markets and small-cap buyout opportunities.