PNC PNC Financial Services Group Inc

On Tuesday, Bank of New York Mellon Corporation (BK) announced the completion of its acquisition of Chicago-based Talon Asset Management’s wealth management arm, which presently has over $800 million in assets under management.

BNY Mellon had announced the deal in April but did not disclose the terms of the agreement. The company stated that the transaction does not include Talon’s hedge fund and private equity businesses. The acquired unit will be integrated into the company’s Investment Management business.

Talon, currently managing $1.2 billion in assets, is a diversified investment management firm that primarily focuses on delivering superior risk-adjusted returns. It is one of the leading independent investment managers in Chicago.

BNY Mellon also commented that Talon employees have become a part of BNY Mellon Wealth Management. Furthermore, Talon’s senior executives – Terry Diamond, Steven Appell, Edwin Ruthman and Alan Wilson – have been given important positions at the Chicago office. Presently, BNY Mellon has about 450 employees in asset servicing and treasury services businesses in Chicago.

BNY Mellon Wealth Management’s CEO, Mr. Lawrence Hughes, stated that the expansion in Chicago is a part of the company’s global expansion strategy. The deal is crucial to BNY Mellon’s growth as the company now forays into the country’s third largest wealth market and aims to deliver new and better services to the region’s wealthy clients and investors.

Additionally, Talon’s clients would benefit from BNY Mellon’s various advanced services that include private banking, wealth planning, improved technology and reporting capabilities, access to alternative investment opportunities, as well as large international asset management services.

BNY Mellon is right on track for consistent inorganic growth. In 2010, the company had acquired PNC Financial Services Group Inc.’s (PNC) Global Investment Servicing business for about $2.3 billion, Germany's BHF Asset Servicing GmbH for €253 million ($330 million), and Toronto-based I3 Advisors for C$22.2 million ($21.1 million).

With the completion of Talon’s acquisition, BNY Mellon’s strategy to provide a full global and local product set, offer a broad mix of traditional and alternative structures, and access local markets through strategic partnerships with foundation clients gets added impetus. Furthermore, the company continues to look for opportunistic acquisitions given the huge growth potential of the overseas securities markets and the rise in new complex securities.

BNY Mellon currently retains a Zacks # 3 Rank, which translates into a short-term ‘Hold’ rating. Also, considering the fundamentals, we maintain a long-term “Neutral” recommendation on the stock.

 
BANK OF NY MELL (BK): Free Stock Analysis Report
 
PNC FINL SVC CP (PNC): Free Stock Analysis Report
 
Zacks Investment Research