Magazine article American Banker

Mellon U.K. Unit Starts Push into U.S. 401(k) Field

Magazine article American Banker

Mellon U.K. Unit Starts Push into U.S. 401(k) Field

Article excerpt

Newton Capital Management Ltd., the London asset management arm of Mellon Financial Corp., announced Wednesday that it had started a U.S. fund, its first, as part of a campaign in the 401(k) market here.

Mark Scott, the head of Newton's institutional business, said in an interview that the company had begun to prepare an expansion into the United States about a year ago. He made a few marketing trips and met with institutional consultants, he said, and realized there is a big opportunity here.

Newton International Equity Fund, the company's first U.S. offering, will be available to retail investors and through 401(k) plans. It is intended to invest mainly in Europe, Australasia, and the Far East, the company said, and has an initial investment of $30 million from the pension fund division and reserves of a U.S. insurer.

Newton expects to accumulate $4 billion of U.S. assets within a few years, Mr. Scott said.

The Mellon unit has hired two executives to handle U.S. sales and services. In January, it added Ciaran Spillane, a former vice president at Bank of Ireland, to head its U.S. business. A second executive, who is to report to Mr. Spillane and help increase U.S. distribution, will join the company next Wednesday.

Mr. Scott said Newton has flirted with the U.S. market for years but now is ready for a "full-fledged" push. It has already been retained by a couple of investments banks to supply services for their wrap programs, he said.

"Those are in the contract stage," he said. "We want to be able to provide products for wealthy investors, institutional investors, and individuals."

The new fund uses the same investment strategy as Newton's separate accounts; it is managed by Paul Butler, the company's global equities investment leader in London. He manages more than $2 billion of the global equity team's $5. …

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