BNY Mellon Beefs Up US Transition Management

Against the direction of many large competitors, one custodian is growing its business to target insurance investors.

(June 25, 2013) — If pension funds and other large institutional investors are increasingly comfortable with using transition managers, there is one group who have not yet bought into the idea, BNY Mellon has found.

Insurers and sub-advisory platforms, where an asset manager, bank, or insurance company outsources the management of a specific fund to a third party asset manager, have often relied on existing broker relationships to move their money.

That attitude is now changing, BNY Mellon says, as investment management companies using these platforms seek to cut down on transaction costs and operational risks.

BNY Mellon has formed a registered investment advisor allowing it to provide a comprehensive suite of services to large investment management firms.

“We’re seeing growing demand for transition management services from insurance companies and other financial intermediary complexes that manage 40 Act Funds,” said Mark Keleher, CEO of BNY Mellon beta and transition management.(

“These complexes are increasingly recognizing the potential benefits of new ways to minimize transaction costs and manage the investment and operational risks associated with overseeing such programs.”

Keleher noted that with the exit of many broker-dealer-based transition managers from the transition management business, demand is rising for transition managers that are registered investment advisors.

Transition management has gone through a torrid time in the past few months, with US exits from industry giants JP Morgan and Credit Suisse.

The 2013 Transition Management survey, carried out by aiCIO, revealed Abel Noser to be the top ranking manager, closely followed by Russell. BNY Mellon meanwhile, ranked just eighth.

Read more from the survey and find out what investors think of their provider—and the industry as a whole—here. 

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