Mitchell Harris has taken the reins at Bank of New York Mellon's investment management business, tasked with continuing to grow the company's assets and global reach.
The rise of the longtime BNY veteran comes after the departure of Curtis Arledge, who left the company to pursue other options after five years at the helm of BNY Mellon Investment Management.
Mr. Harris is hoping to stay the course at the $1.6 trillion asset management firm, said BNY spokeswoman Melissa Cassar. He has been with BNY Mellon since 2004, first as CEO of Standish Mellon Asset Management Co. LLC — a BNY Mellon investment boutique — from 2004 to 2009, then chairman of BNY Mellon Asset Management's fixed-income, cash and currency group from 2009 to 2011. In 2011, he was named president of investment management at BNY Mellon.
As president, Mr. Harris already was overseeing the day-to-day operations of the company's 13 global investment boutiques, said a news release announcing the leadership change issued in late February.
Although not commenting on BNY Mellon Investment Management specifically, Tim Barron, Chicago-based senior vice president and chief investment officer at investment consultant Segal Rogerscasey, explained that in money management, “promoting from within can be a statement to investors that nothing is broken and the organization wants the ship to keep sailing in the same direction.”
That “can give employees, investors and consultants a sense of continuity and lessens the concern of the impact of an unfamiliar hand at the tiller,” he said. But on the other hand, Mr. Barron noted: “An internal move squanders an opportunity to have the benefits of a new, "outsider' perspective.”
Messrs. Harris and Arledge were not available for comment.
BNY Mellon Investment Management had $1.625 trillion in combined assets under management as of Dec. 31, up 42% since Mr. Arledge joined in 2010.
But 2015 was rocky for BNY's investment management business, with total assets under management slipping 3.6% from 2014, pinched by a 3.2% decline in institutional assets under management and a 4.4% decline in mutual fund assets under management.
Also, long-term net outflows totaled $11 billion in the fourth quarter, the third consecutive quarter of long-term net outflows. For the year, those outflows reached $17 billion, compared with inflows of $48 billion in 2014.
By comparison, J.P. Morgan Asset Management reported $1.723 trillion in assets under management as of Dec. 31, up 1% from Sept. 30 but down 1% from 12 months earlier. Based on quarterly earnings statements, JPMAM experienced net inflows of $40 billion in 2015.
One investment banker noted that in general, “it has been a tough year for many asset managers, so it is not a surprise that there is turnover in management ranks.”
When Mr. Arledge, a BlackRock veteran, was recruited to lead what was then called BNY Mellon Asset Management in September 2010, he had big ambitions for the firm. In an interview with Pensions & Investments in 2012, Mr. Arledge discussed his plans to build BNY Mellon Asset Management's local investment capabilities in Asia and Latin America while supporting an environment in which the company's boutiques could better work together for clients.
“Growth in Asia is clearly something that we are focused on,” he told P&I in 2012. “Another major element is to ensure that clients globally fully understand the incredible capabilities of BNY Mellon's investment management firms.”
In June 2011, Alan Harden was named CEO of Asia-Pacific for BNY Mellon, a new position, reporting to Mr. Arledge. In late 2014, BNY Mellon was opening a new wealth management practice in Hong Kong.
BNY Mellon Investment Management's AUM in the Asia-Pacific region is now $90 billion, up 60.7% from $56 billion four years ago. Comparable metrics for Latin America weren't available.
Some industry observers noted that Mr. Arledge is considered a talented and ambitious leader who had difficulties implementing his goals at BNY Mellon.
“Curtis (Arledge) is a really smart strategic thinker, but wasn't able to get stuff done for whatever reason,” said one executive recruiter who asked not to be named. He speculated that Mr. Arledge might not have had “the checkbook” from the parent company to implement some things he wanted done within the asset management business.
In an e-mailed statement, BNY's Ms. Cassar said: “As we have said in the past, Curtis Arledge was a strong contributor who decided to pursue opportunities outside of the company. Curtis helped revitalize our central distribution organization and reposition our investment capabilities to align with client demand.”
Ms. Cassar added: “Mitchell, like Curtis before him, will continue to be fully supported by (BNY Mellon's chairman and CEO) Gerald Hassell and BNY Mellon's entire executive team.”
Even with his familiarity of the daily operations of BNY Mellon's global investment boutiques, there are challenges for Mr. Harris going forward.
“For large asset managers, even multimanager boutiques that are publicly held, a major challenge is being able to effectively serve three masters who often have conflicting goals: the shareholders, the employees and the investors,” Mr. Barron explained. n