Mellon Investments Corp.'s fixed-income, equities and multiasset, and liquidity management teams and strategies will be moved to other affiliate managers within the BNY Mellon Investment Management stable.
The decision was made in partnership with the relevant firms, Hanneke Smits, CEO of BNY Mellon Investment Management, said in an interview. The transitions are expected to complete by the end of the third quarter, subject to regulatory approvals, and there will be no changes to investment processes of philosophies during the transition period.
The change was made "clearly with our clients' interests at heart," particularly as they continue to search for outcome-oriented solutions, Ms. Smits said.
Mellon's $105.2 billion in fixed-income AUM, covering stable value, municipal, efficient beta and taxable fixed-income strategies, will move to Insight Investment, creating a $1.1 trillion money manager specializing in global fixed-income and liability-driven investment.
"We're excited from an Insight perspective," Abdallah Nauphal, CEO at Insight Investment, said in an interview. "It doesn't just fit in our strategy, it actually accelerates our strategy," expanding into new sectors and then taking those capabilities global.
Gaining Mellon's fixed-income team and strategies bring experience in municipals and efficient beta, for example, and also "opens up new areas in terms of client reach," specifically in the insurance sector and the defined contribution market "where we have not been as probably focused in the past, but (what is) a very natural extension of what we do."
Mellon's equities and multiasset strategies and teams will move to Newton Investment Management. BNY Mellon Investment Management Japan's Japanese equities team will also be integrated with Newton, creating a $140 billion investment firm. Newton had $62.8 billion in assets under management as of Dec. 31.
The integration of Mellon's capabilities will enlarge the firm's global footprint to cover North America, Europe and Asia-Pacific.
For Newton also, the transition of Mellon's business "is a continuation and acceleration ... of our stated strategy in terms of delivering for clients" and particularly in terms of the firm's research platform, which has been central to Newton since launch in 1978, Julian Lyne, chief commercial officer at Newton, said in the interview.
The change brings "quantitative skillsets" to Newton, while Newton can share its experience to help progress Mellon when it comes to the integration of environmental, social and governance factors and the importance of sustainability in investing.
The final part of the transition will see Mellon's cash team and strategies integrated with Dreyfus Cash Investment Strategies' existing money market mutual funds, UCITS funds and collective investment vehicles. Dreyfus will have more than $300 billion in assets under management, up from $259.5 billion as of Dec. 31.
Mellon will continue to run institutional equity and fixed-income index strategies, with more than $390 billion in assets under management. Stephanie Pierce will remain CEO of the index business, but Des Mac Intyre, Mellon CEO, will leave at the end of February. Michael Germano, chief operating officer, will take on responsibilities as CEO of active management during the transition period.
BNY Mellon Investment Management has $2.2 trillion in assets under management. Its other affiliates, Alcentra, Walter Scott, ARX and Siguler Guff, are not impacted by the changes.