Bank of New York Mellon has agreed to acquire ARX Capital Management, an independent asset management business headquartered in Rio de Janeiro that specialises in Brazilian multistrategy, long/short and long-only investment strategies and has more than USD2.6bn in assets under management.
The terms of the acquisition, which is expected to close in the first quarter of next year, have not been disclosed. ARX Capital Management will be integrated with BNY Mellon Asset Management Brasil and the combined business will become one of the country's largest asset managers.
'The acquisition of ARX Capital Management is a key development in our global growth and will enable us to offer clients access to expanding investment opportunities and expertise in the Brazilian marketplace,' says Ronald P. O'Hanley, president and chief executive of BNY Mellon Asset Management.
'In addition to meeting our strategic objective of broadening our capabilities in the world's most important emerging markets, the acquisition of ARX Capital Management is financially compelling, and exceeds our internal return hurdles.'
Founded in 2001, ARX Capital Management manages 20 domestic and offshore long-only equity and hedge funds and has capitalised on the region's significant economic growth by building a strong local investor base. BNY Mellon DTVM Brasil is the administrator for the majority of the ARX funds.
'ARX Capital Management and BNY Mellon Asset Management Brasil have highly complementary businesses and we already have a strong working partnership,' says ARX chief executive José Alberto Tovar. 'Together we will expand the depth and breadth of our client base, enhance our product offering and increasing our focus on attracting and retaining talent. This combination positions both organisations well in a region that is growing rapidly.'
BNY Mellon Brasil, which recently celebrated its 10th anniversary in the region, has more than USD26bn in assets under management and administration. Its asset management arm focuses on Brazilian fixed income, hedge funds and long-only equity funds. Tovar will become head of the asset management business, reporting to Zeca Oliveira, who will lead the integrated group.
'Brazil is among the fastest developing economies in the world and continues to benefit from the high prices of commodities, thanks to its wealth of natural resources,' says Jon Little, vice-chairman of BNY Mellon Asset Management. 'Coupled with the continued maturation of the capital markets in Brazil, this has intensified the spotlight on the country.
'Our integrated business will complement our focus in the institutional marketplace with the addition of high net worth individuals and family office, and also provide access to new products for our global client base. ARX Capital Management, with its strong leadership, excellent products and strong historic and future growth potential, will significantly enhance our global product offering.'
The Brazilian asset management industry is the 10th largest in the world, according to Anbid/ICI, and over the last five years has grown at an average annual rate of 27 per cent. The industry focus is moving from traditional fixed-income strategies to equity and alternative products including hedge funds and currency-based strategies.
Bank of New York Mellon operates in 34 countries and serves more than 100 markets as a provider of financial services including asset and wealth management, asset servicing, issuer services, clearing and treasury services to institutions, corporations and high-net-worth individuals. It has more than USD20trn in assets under custody and administration, more than USD1.1trn in assets under management and services USD11trn in outstanding debt.