Expanding Asset Management Capabilities

While The Bank of New York began to manage funds for its private clients in 1832, with Mellon to follow at its founding in 1869, for both companies the eventual full-scale expansion of asset management was primarily an outgrowth of the asset servicing and wealth management franchises. The institutional and high-net-worth clients who relied on The Bank of New York and Mellon to hold and service their assets increasingly looked to their providers for help in achieving their investment performance goals.

Accordingly, over the twentieth century both companies moved more aggressively to build out their traditional investment strategies, including equities, fixed income and mutual funds. For The Bank of New York, the 1930s was a critical period. In 1933, in what was undoubtedly viewed as daring, the Bank invested trust assets in common stocks, a rudimentary precursor to modern asset management. Around that time, the Bank enlarged its trust and investment staff to attract and manage funds beyond the realm of trusts.

The Bank of New York was early to the trend of emphasizing alternative investment strategies, acquiring Ivy Asset Management, a leading fund of hedge funds manager, in 2000, and subsequently expanding into other alternative investment categories, including real estate.

Mellon accelerated its momentum as an asset manager in 1983, with the establishment of Mellon Capital Management, a firm with a solid record of innovative achievement and whose founders are recognized as the originators of value-based tactical asset allocation and index fund management.

In the 1990s, Mellon's expansion reached critical mass, first with the 1993 acquisition of The Boston Company, a leader in the creation of investment products and strategies tailored to the needs of pension plan sponsors. One year later, Mellon acquired Dreyfus, one of the oldest and largest mutual fund companies in the U.S. and a pioneer in the development and distribution of money market funds. Together, these acquisitions gave Mellon a distinctive presence in the domestic institutional asset management market space.

Anticipating the coming globalization of asset management, Mellon acquired a majority interest in London-based Newton Investment Management in 1998 and created Mellon Global Investments, based in London, as an international distribution channel for its investment management products.

During 2001-2006 Mellon added to its growing roster of asset management boutiques to provide clients with a broad range of investment alternatives and expand the international scope of its asset management business. With these acquisitions, Mellon's number of individual investment firms grew to 14, securing its position of offering one of the world's broadest sets of asset management capabilities.