), the largest custodian of assets in the world, recently agreed to
buy Talon Asset Management's wealth management operations. The deal
adds $800 million in assets to BNY Mellon's private client assets
and provides better access to clients in the Chicago area. BNY
Mellon competes with top asset managers like State Street (
), BlackRock (
), Deutsche Bank (
) among others.
We currently have a
$35.76 price estimate for BNY Mellon's stock
, with the asset & wealth management division contributing 26%
of this value.
The acquisition of Talon's wealth management business, while
notable, adds little upside to BNY Mellon's stock value due to the
relatively small incremental effect of Talon's assets on BNY
Mellon's existing base of assets under management (AuM).
BNY Mellon's Asset Under Management
The above chart represents the combined AuM of BNY Mellon's
asset management and wealth management businesses.
BNY Mellon's AuM hit $1,121 billion in 2007 after the merger
of Bank of New York Company and Mellon Financial
Corporation. AuM dropped to $928 billion in 2008 before
recovering to $1,172 billion in 2010.
As illustrated in the interactive chart above, an $800 million
increase in AuM in 2011 is insignificant compared to BNY
Mellon's large asset base, adding minimal upside to the firm's
However, the acquisition is important as it indicates BNY
Mellon's focus on expansion, both domestically and abroad, which
could spark further AuM growth going forward.
See our analysis of the outlook for BNY Mellon's AuM
Check out our full analysis for BNY Mellon's stock