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BOSTON, July 30, 2004 - Mellon Financial
Corporation (NYSE:MEL) announced that it has signed a definitive
agreement to acquire the 70% of Pareto Partners that it does not
currently own from Pareto’s employees and XL Capital Ltd (NYSE:XL).
Mellon will be acquiring Pareto’s currency
management business, which manages $35 billion in assets and is one of
the largest in the world, and Pareto’s global fixed-income asset
management business, which manages $3 billion. In a separate transaction,
Pareto will sell its New York-based core/core plus and high-yield fixed
income asset management businesses, with approximately $3 billion under
management, to MacKay Shields LLC, a unit of New York Life Insurance.
Terms of the transactions were not disclosed.
Mellon Financial has worked closely with
Pareto’s leadership team and owned a portion of the business since it was
created in 1991. Pareto’s employees currently own 40% of the firm, while
Mellon and XL Capital Ltd each own 30%. The transaction is expected to
close in the third quarter of 2004, subject to receipt of regulatory and
other approvals.
"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 P. O’Hanley, Mellon vice chairman and
president of its institutional asset management business. "The global
fixed-income operation will augment the capabilities of our Standish
Mellon Asset Management subsidiary."
Mitchell Harris, chief executive officer of
Pareto, will become the non-executive chairman of Pareto. Michael Shilling,
who has been head of portfolio services at Pareto since 1998, will become
Pareto’s chief executive officer. Pareto will focus exclusively on currency
strategies. Pareto’s fixed income professionals in London and Los Angeles
will join Standish Mellon, a Mellon subsidiary that is the sixth-largest
fixed income manager in the world with approximately $200 billion in assets
under management.
Harris has relocated to Boston and will
become chief executive officer of Standish Mellon, succeeding William
Adam, who will become chairman of Standish Mellon until he retires at
the end of the year. Ted Ladd, Standish Mellon’s current chairman, will
become chairman emeritus.
Harris said, "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. On the global
fixed income side, we can leverage Standish Mellon’s scale, substantial
resources and reputation."
Headquartered in Pittsburgh, Mellon is one of
the world’s leading providers of financial services for institutions,
corporations and high net worth individuals, providing institutional asset
management, mutual funds, private wealth management, asset servicing, human
resources services and treasury services. Mellon has approximately $3.6
trillion in assets under management, administration or custody, including
more than $675 billion under management. Its asset management companies
include The Dreyfus Corporation and U.K.-based Newton Investment Management
Limited. News and other information about Mellon is available at
www.mellon.com. |
