LDI Specialist Cutwater to Fold into BNY Mellon

The financial giant has inked an agreement to purchase Cutwater, which has $23 billion under management.

BNY Mellon has reached a deal to purchase fixed-income firm Cutwater Asset Management, the banking corporation announced on Monday. 

Cutwater, a specialist in liability-driven investing (LDI) products, has roughly $23 billion in assets under management. If the purchase closes as expected, it will merge into Insight Investments, a boutique operation under BNY Mellon Investment Management’s umbrella.

Based in Armonk, New York, with a US clientele, Cutwater would significantly expand London-based Insight’s reach into the American institutional market.

“Insight has grown by aligning our investment solutions with the needs of our clients,” said Insight’s CEO and CIO Abdallah Nauphal. “Cutwater’s strong US domestic fixed income and solutions track record and experienced team 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.”

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BNY Mellon Investment Management’s CEO Curtis Arledge credited Cutwater with “an impressive performance history, strong intellectual capital, and an investment culture consistent with BNY Mellon’s.”

Cutwater is at present wholly owned by holding company MBIA, which also operates divisions that guarantee public and private debt.

BNY did not disclose the price it agreed to pay for Cutwater. Following regulatory review, the transaction is expected to close before the third quarter of 2015. 

Related Content:  2013 Liability-Driven Investing Survey

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