T. Rowe Price hired Bank of New York Mellon to provide fund accounting and administration services for all of T. Rowe's $770 billion in assets under management.
The services had been handled internally.
BNY Mellon is expected to hire the 220 T. Rowe Price employees who worked in accounting services, BNY Mellon said in a news release. The transfer will occur in August.
The move was made in response to “ongoing business, technology, and regulatory changes,” said Brian Lewbart, T. Rowe Price spokesman. “Economics were not a primary factor in the decision, and we do not expect that this strategic decision will have a material impact on our future operating results.”
The need to replace its portfolio record-keeping system was what spurred a broader review of T. Rowe Price's investment operations needs, Mr. Lewbart said. “We weren't following an intentional strategy of reviewing our operations with an eye toward identifying opportunities for strategic relationships,” he said.
Last year, BNY Mellon assumed real estate fund administration for Deutsche Asset & Wealth Management, taking on $47.6 billion in assets under administration. In 2011, BNY Mellon acquired the back-office operations of Bridgewater Associates, which had $170 billion in assets under management as of April 30.
“From time to time, we identify these strategic opportunities,” said Mike Dunn, BNY Mellon spokesman. “These don't come along very often.”