BNY is making changes to the management structure and operations of affiliate Newton Investment Management, which includes the departures of CEO Euan Munro and co-CIO Mitesh Sheth.
Effective in April, John Porter will be sole CIO of Newton, reporting directly to Jose Minaya, global head of BNY Investments and Wealth.
Munro and Sheth will not be directly replaced.
“I do plan to be more directly involved, especially at this stage of the business,” Minaya confirmed to Pensions & Investments in an interview. He said that he will make sure to “double down” in the investment acumen and resources, adding that the message he is sending internally and externally is that, in not naming a new CEO, the “overriding duty is on me. That should send the message that I’m focused on this platform, and believe in it and am spending more time on it,” he said.
Porter was co-CIO alongside Sheth, responsible for all equity strategies. He has been with BNY since 2016. Although Porter is based in Boston, he will spend more time in London.
Munro joined as CEO in 2021 from Aviva Investors, where he had been CEO for seven years. Munro was previously best-known in the asset management industry for being a star fund manager on Standard Life’s global absolute return strategies.
Sheth joined as co-CIO in 2022 from U.K. consultant Redington, where he was CEO.
Newton is an £81.3 billion ($105 billion) affiliate asset manager of BNY, which across its firms has a total $2.2 trillion in assets under management. Newton’s strategies span equities, absolute return, multiasset, thematic and sustainability, with offices in London, the U.S. and Japan.
Although the brand is more thought of as a U.K. multiasset manager, Newton primarily manages equity funds and has a larger share of business in North America vs. the U.K. Minaya said. “That tells me the brand should still stay strong ... I take a lot of confidence looking at what Newton does — (we’ve) seen it can travel in North America and Asia,” where Japan AUM is up to about $4 billion, he added.
However, Minaya has seen “very little cross-selling,” with clients using just one product or capability — both within Newton and between the firm and its other affiliates. “Across $2 trillion, that’s almost hard to do on purpose,” he said.
Minaya isn’t looking at that as a negative, “but as a massive opportunity to offer more to our clients — create scale and resources of what we can deploy to our clients.”
Other changes to Newton will see several operations teams move into a centralized BNY chief operating officer leadership team, while sales and distribution teams will move from Newton into existing BNY Investments distribution teams. However, none of the changes impact the portfolio management or research teams responsible for the assets under management.
In his first six months as CEO, Minaya, who was previously the CEO of Nuveen, looked at the seven investment affiliates, he said in the interview.
He sees “tremendous opportunity” in the investment firms and capabilities — “there were not broken toys in terms of investment performance, client base,” he said — but there is a question about why the firm’s products do not “travel more.”
The investment management industry today is focused on investment performance, but also the competitive advantage that a firm offers, such as scale, technology base, ease of use, or giving clients access to something that isn’t easy to find elsewhere — as is the case with some alternatives products, he said.
BNY’s investments business is part of the broader BNY global financial services firm, including a custodian bank with more than $50 trillion in assets under custody. The firm last year invested approximately $4 billion in technology alone, Minaya added.
The goal, he said, is how to make Newton, as a $105 billion investment platform, “fit into this $50 trillion type of ecosystem.”
“For me, sitting on these manufacturing capabilities, (the question is) how to open that up so to allow these products to travel more broadly,” Minaya said, adding that the firm is not immune to industry pressures such as focus on fees and shifts to passive investing. The key, he said, is to adjust to the dynamics and “lean into competitive advantages” that will better serve clients.
Minaya said a natural question arising from the Newton changes is whether this model will be replicated elsewhere, such as at £626.2 billion fixed-income and liability-driven investing firm Insight Investment.
“I don’t believe in a cookie-cutter format — what you do with one platform doesn’t imply what you’ll do with another,” he said. But he has asked executives to consider how to “think locally but act globally. That is at the core of our values and what we do,” Minaya said. “Culture equals performance — we very much encourage different cultures within the capabilities, but we live in a global world. That, to me, is where the opportunity lies.”
