GLOBAL – Mellon Financial Corp. is to buy the 70% of currency management firm Pareto Partners that it does not already own for an undisclosed sum.
Mellon said in a statement that it has signed a definitive agreement to acquire the stake from Pareto’s employees and New York Stock Exchange-listed risk specialist XL Capital.
Mellon will buy Pareto’s currency and fixed-income businesses, which manage 35 billion dollars and three billion dollars respectively. It will become part of its Standish Mellon fixed-income unit.
Pareto chief executive Mitchell Harris will become CEO of Standish Mellon, taking over from William Adam. Adam will chair Standish Mellon until he retires at the end of the year.
Michael Shilling, Pareto’s head of portfolio services, will become Pareto’s CEO – with Harris as non-executive chairman.
“By working more closely with Mellon, Pareto has the best of both worlds, it will remain autonomous from an investment and management perspective and will be able to focus its resources exclusively on currency management for its clients,” Harris said.
“Pareto’s currency management business is becoming an increasingly integral part of our strategic growth plans, and we are looking forward to leveraging Pareto’s intellectual capital and global perspective to create additional innovative strategies for the benefit of our clients,” said Ronald O’Hanley, president of Mellon’s institutional asset management business.
Mellon has been an owner of Pareto since it was launched in 1991. The transaction is expected to close in the third quarter of 2004, subject to receipt of regulatory and other approvals.
In a separate deal, Pareto will sell its core/core plus and high-yield fixed income asset management businesses to New York Life Insurance’s MacKay Shields.