BNY Mellon has acquired hedge-fund managed account platform HedgeMark International, three years after first investing in the firm.
The bank said it had agreed to buy the remaining 65% of HedgeMark it does not already own. The deal is expected to close in the second quarter.
Financial terms of the transaction were not disclosed. HedgeMark founder and CEO Ken Phillips will retire from the firm when the deal closes, to be replaced by Andrew Lapkin, currently the firm's president.
BNY Mellon's Pershing unit took a 35% stake in HedgeMark in 2011—a deal that gave the bank the right to acquire the firm outright over time. Since then, HedgeMark has served as an affiliate of BNY Mellon.
"HedgeMark has collaborated closely with BNY Mellon's investment services business these last three years to deliver client- and market-driven solutions for the alternatives industry," Lapkin said. "We look forward to taking our partnership to the next level in the years ahead."
"As institutional clients continue their shift into alternatives, especially hedge funds, this acquisition will enable us to better meet demands for improved governance, risk reporting, and transparency," Samir Pandiri, BNY Mellon's CEO of asset servicing, said. "We'll be able to integrate HedgeMark's capabilities with our Global Risk Solutions offerings to set a new industry benchmark on risk and transparency. It marks the next step in our strategy to provide sharper insight into hedge fund investments and enterprise risk across a client's entire portfolio."