On Thursday, The Bank of New York Mellon Corporation (BK) announced a deal to acquire Chicago-based Talon Asset Management’s wealth management business. At present, Talon’s wealth management arm has over $800 million in asset under management. The company would integrate the acquired unit into its Wealth Management business.
Talon, which currently manages $1.2 billion in assets, is a diversified investment management firm that primarily focuses on delivering superior risk-adjusted returns. Talon is one of leading independent investment managers in Chicago.
Although the agreement terms were not disclosed, BNY Mellon stated that the transaction does not include Talon’s hedge fund and private equity businesses. The deal is expected to close in the second quarter of 2011.
BNY Mellon also commented that on the completion of the deal, Talon employees will become a part of BNY Mellon Wealth Management. Furthermore, Talon’s senior executives – Terry Diamond, Edwin Ruthman and Alan Wilson – will be given senior positions at the Chicago office. Presently, BNY Mellon has about 450 employees in Chicago in asset servicing and treasury services businesses.
BNY Mellon Wealth Management’s CEO, Mr. Lawrence Hughes, commented that expansion in Chicago is a part of the company’s global expansion strategy and marks an important step towards the company’s growth in the region. The deal will enable the company to enter the country’s third largest wealth market and deliver new and better services to the region’s wealthy clients and investors.
Additionally, Talon’s clients would benefit from BNY Mellon’s various advanced services that include private banking, wealth planning, improved technology and reporting capabilities, access to alternative investment opportunities as well as large international asset management services.
Last year, BNY Mellon had acquired PNC Financial Services Group Inc.’s (PNC) Global Investment Servicing business for about $2.3 billion, Germany’s BHF Asset Servicing GmbH for €253 million ($330 million), and Toronto-based I3 Advisors for C$22.2 million ($21.1 million).
The latest deal is a part of BNY Mellon’s strategy to provide a full global and local product set, offer a broad mix of traditional and alternative structures, access local markets through strategic partnerships with foundation clients and look at opportunistic acquisitions.
BNY Mellon currently retains a Zacks #3 Rank, which translates into a short-term Hold’ rating. Also, in the absence of any significant positive or negative catalyst, we maintain a long-term “Neutral” recommendation on the stock.