New York has not vanished BNY Mellon Acquires PNC Administration Unit

New York

Bank of New York Mellon said Tuesday it was buying an administration business from PNC Financial Services, vaulting the bank into the top ranks of hedge fund administrative firms.

BNY Mellon is buying PNC Global Investment Servicing for $2.3 billion, the bank said in a statement. The deal includes the purchase of $1.6 billion in stock and repayment of PNC Global debt.

BNY expects to raise between $700 million and $800 million as part of the deal. The transaction is expected to close in the third quarter of the year.

The deal will add $855 billion in assets under administration to BNY’s coffers.

The acquisition will secure BNY in one of the top slots among the largest administrators for hedge funds and funds-of-funds. According to the Q2 2009 HFN Fund of Funds Administrator Survey, BNY had about $199 billion in hedge fund firms’ assets under administration, while PNC had about $77 billion as of June 30.

The new combination would leave only Citco Fund Services and State Street Alternative Investment Solutions in the same size category as BNY when it came to providing services to hedge funds.