Newton's all change white paper identifies winning attributes for survival in asset management

LONDON, June 4, 2009 — Newton*, part of BNY Mellon Asset Management, believes that asset managers that can provide credible return solutions that meet clients' objectives versus 'products', will emerge as the winners in the aftermath of the financial crisis.

This is just one of the key findings from a Newton white paper titled "The expected impact of all change on the asset management industry". The white paper is centered on Newton's all change theme, which explores the implications of the significant deleveraging brought about by the popping of the credit bubble, and identifies eight attributes which Newton believes will differentiate the winners within asset management in years to come.

Helena Morrissey, CEO of Newton, said: "This white paper analyzes the sea change that needs to take place in order for asset managers to adapt to the new environment."

"Over the last two decades the industry saw a shift towards a more distribution and product-driven model, in which credibility and success were typically associated with the size of a firm's assets under management. However, poor performance from some of the industry's top names, together with general disappointment with absolute returns, has led to a trend reversal. In the future, we believe that the reputation and culture of an organization will depend more on its ability to deliver consistent investment performance in a clear and transparent manner. This 'back to basics' trend is to be welcomed, as the industry seeks to regain the trust of its clients. We will have achieved success when solutions to real needs are bought by consumers, instead of products being sold."

Complex financial instruments and black box models, which are perceived to have contributed significantly to the current financial crisis, have been widely discredited and investors and their advisers are turning to investment propositions that are transparent, simple and consistent. The white paper reveals that those asset managers with 'proven track records, tested processes, and robust and demonstrable risk management' will be highly prized and attract the most investor interest. Newton believes that just as people need and want a doctor or a lawyer, they should be able to seek out a money manager who they trust and with whom they build a long term relationship.

The attributes of winning asset management firms identified in the white paper include:

1. Delivery of strong and consistent investment performance
2. Organizational structures that attract and retain top investment professionals
3. Clear branding and a conviction about what the brand stands for
4. Close relationships with clients and an emphasis on service
5. Distribution efficiencies and scale, balanced by an investment-led focus
6. Ability to operate successfully within a much tighter regulatory framework
7. Simple and transparent investment approaches
8. Ability to deal successfully with the structural shift from DB to DC

Morrissey concluded: "The implications identified in our all change theme are profound and no economy, sector nor asset class is immune. It is clear that those companies that can anticipate and adjust their approach in the aftermath of the credit crisis will emerge as the winners. The purpose of this paper is to stimulate debate at the wider industry level around how the asset management industry can best do that."

Newton Investment Management Limited is a London-based global asset management subsidiary of The Bank of New York Mellon Corporation and part of BNY Mellon Asset Management. With assets under management of more than $48 billion, including assets managed as dual officers for The Bank of New York Mellon, Newton's group of affiliated companies provides a broad range of award-winning investment products and services to individuals, pension funds, charities and corporations. News and other information about Newton is available at www.newton.co.uk.

BNY Mellon Asset Management is the umbrella organisation for The Bank of New York Mellon Corporation's affiliated investment management firms and global distribution companies.

The Bank of New York Mellon Corporation is a global financial services company focused on helping clients manage and service their financial assets, operating in 34 countries and serving more than 100 markets. The company is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team. It has $19.5 trillion in assets under custody and administration, $881 billion in assets under management, services more than $11 trillion in outstanding debt and processes global payments averaging $1.8 trillion per day. Additional information is available at www.bnymellon.com.

*'Newton' refers to the following group of affiliated companies: Newton Investment Management Limited, Newton Capital Management Limited, Newton International Investment Management Limited, Newton Capital Management LLC and Newton Fund Managers (CI) Limited. Assets under management include assets managed by all of these companies except Newton Capital Management LLC, which provides marketing services in the U.S. for Newton Capital Management Limited. Except for Newton Capital Management LLC and Newton Capital Management Limited, none of the other Newton companies offer services in the US. Newton Capital Management Limited is an investment management firm authorized and regulated in the United Kingdom by the Financial Services Authority in the conduct of investment business and is a wholly owned subsidiary of The Bank of New York Mellon Corporation. Registered in England no: 2675952. Newton Capital Management Limited is registered in the United States as an investment adviser under the Investment Advisers Act of 1940. All information source BNY Mellon Asset Management as at 31 March 2009. This press release is qualified for issuance in the UK and US and is for information purposes only. It does not constitute an offer or solicitation of securities or investment services or an endorsement thereof in any jurisdiction or in any circumstance in which such offer or solicitation is unlawful or not authorised. This press release is issued by BNY Mellon Asset Management (US) and BNY Mellon Asset Management International Limited (ex-US) to members of the financial press and media and the information contained herein should not be construed as investment advice. Past performance is not a guide to future performance. Registered office of BNY Mellon Asset Management International: The Bank of New York Mellon Centre, 160 Queen Victoria Street, London, EC4V 4LA. Registered in England no. 1118580. Authorised and regulated by the Financial Services Authority
A Bank of New York Mellon Company(SM)

SOURCE: The Bank of New York Mellon Corporation; Newton

Web site: http://www.bnymellon.com/