Bank Of New York Expands Alternative Investment Offering

by Phillip Morton, Investors Offshore.com

16 February 2006

The Bank of New York Company, Inc. has signed a definitive agreement to acquire the real estate investment management firm Urdang Capital Management, Inc. and Urdang Securities Management, Inc. in a bid to expand its alternative investment offering.

The transaction is expected to close by the end of the first quarter, pending regulatory approval and other conditions. The purchase price and terms were not disclosed.

Commenting on the acquisition of Urdang, which manages more than $3 billion in private equity investments and portfolios of REIT securities, Thomas A. Renyi, chairman and CEO of BNY explained that the move "underscores the continued expansion of our alternative investment solutions for our institutional and private clients."

"Urdang has built a strong reputation over 18 years in the institutional real estate investment community and will provide our clients with an important asset class that supports their diversification and asset allocation strategies," he added.

The agreement with Urdang follows BNY's recent acquisition of Alcentra which specializes in sub-investment grade debt fund management and structured credit products, two acquisitions that Steven Pisarkiewicz, head of BNY Asset Management, noted will expand the bank's presence in "two highly attractive alternative investment market segments."

"Urdang’s strong investment performance, variety of real estate investment vehicles and proven investment process significantly bolster our alternative investments platform, which will increase our ability to attract and retain asset management clients," observed Mr Pisarkiewicz, who is also executive vice president of The Bank of New York.

Meanwhile, E. Scott Urdang, chief executive officer of Urdang Capital Management, Inc., noted that BNY's "substantial" strengths in asset management and distribution, combined with Urdang's expertise in the real estate market makes the acquisition "a perfect fit" for both parties.

"Our entire investment management team will remain in place and continue to pursue the investment processes and strategies that have delivered consistently strong returns for our clients through all market cycles," Mr Urdang explained.

Based in Plymouth Meeting, Pennsylvania, Urdang Capital Management, Inc. is an independently owned investment manager that focuses exclusively on private and public real estate investments on behalf of large corporate and public pension funds, as well as other institutional investors. It has completed over $4 billion of real estate transactions over the past 18 years focusing on investments in office, apartment and retail properties throughout the United States.

The Bank of New York currently has around $107 billion in assets under management.

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