BNY Mellon has completed the purchase of Cutwater Asset Management, allowing its investment boutiques to gain a foothold in the US institutional and fixed income market.
Cutwater, based in New York State, has $23bn (€18.3bn) in assets under management and is currently a wholly owned subsidiary of US bond insurer MBIA.
It will operate as part of the BNY Mellon Investment Management brand but be managed by its largest boutique, Insight Investment.
The sale is still subject to regulatory approval, and financial details on the transaction have not been disclosed by either party.
BNY Mellon said Cutwater would now allow Insight to “enhance” its US offering and fixed income solutions.
Cutwater currently specialises in core fixed income strategies, alongside long duration, high yield, loans and absolute return strategies.
BNY Mellon said the deal was struck at the right time given the “unprecedented” interest in fixed income markets, allowing its boutiques to expand their capabilities in that area.
Insight Investment chief executive and CIO Abdallah Nauphal said the purchase of Cutwater by BNY Mellon would allow Insight to build on its European brand on the back of the new US business’s “track record and experienced team”.
He added: “[The purchase] will complement Insight’s strategy in the US as we build upon our existing position as a European leader in liability risk management and fixed income.
“Working closely with Cutwater will augment our current fixed income capabilities, deepening our fixed income research and portfolio management expertise in the world’s biggest and most diverse credit market.”
Clifford Corso, chief executive and CIO at Cutwater, added: “This union is a logical next step for Cutwater. We share a similar investment philosophy and approach designed to offer products and relevant client solutions.”
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