Mellon targets multi-national pooling
GLOBAL - Mellon Financial Corp. is targeting multi-national pooling as one of the drivers for its asset servicing business, according to the division's head Jim Palermo.
Vice chairman Palermo said that on the segment side the business is targeting institutional investment managers, mutual funds, insurance companies and hedge funds.
On the product side, Pittsburgh-based Mellon had made "significant investments" in derivatives, hedge fund administration, mutual fund administration, investment manager support and multi-national pooling.
The company set up a full-service office in early 2006 in Luxembourg, he said during an investor presentation, as part of a strategy to target clients outside the US. Non-US assets under custody have risen to $1.7trn from $0.7trn in 2003.
Ron O'Hanley, the head of Mellon's asset management unit, also referred to the importance of international clients. Some 68% of new business revenue is from non-US clients in the year to date, he said.
Non-US asset management revenues have grown to $467m in 2005 from $208m in 2002.
The business has had a total of $40bn in net flows in the year to September 2006, Hanley said.
He also said that as part of a strategy to develop its international business s that it would "enhance and globalise" its consultant relations approach as well as "leverage the global custody relationship" - i.e. sell asset management to custody clients.
Chief executive Robert Kelly outlined plans to increase earnings in the next three years by cutting costs, expanding outside the home market and improving fund returns.
"We want to be a first-quartile performer,'' Kelly said on the presentation, according to Bloomberg News. "We have the businesses, and we absolutely have the team of people to deliver this.''
Meanwhile, Mellon's Newton Investment Management, says it has been awarded a £300m global equity mandate by the Hampshire Pension Fund in the UK.