BNY Mellon’s Pershing announced it has entered into a definitive agreement to acquire Optimal Asset Management, a direct indexing solutions provider. Optimal Asset Management’s patented, cutting-edge software provides customizable direct indexing solutions to investors seeking personalized portfolios that are aligned to their values. Optimal Asset Management meets a growing client need for greater investment customization by selecting individual equities in an index solution, including options to tailor their portfolios for sustainable investments.

We are set to accelerate our commitment to deliver the industry’s leading end-to-end advisory platform with our agreement to acquire direct indexing provider Optimal Asset Management. https://t.co/O0y1SWYofU pic.twitter.com/lNWSkIyPam

— BNY Mellon | Pershing (@Pershing) December 2, 2021

The acquisition will form part of the new Pershing X offering – a recently launched business unit within Pershing that will design and build innovative solutions for the advisory industry.

The direct indexing market is expected to grow from $350 billion in assets under management (AUM) in 2020 to $1.5 trillion in AUM by 2025*.

“We’re thrilled to welcome Optimal Asset Management’s founder Dr. Vijay Vaidyanathan and his talented team of software architects to Pershing X. Optimal Asset Management will help advisors at our client firms improve relationships and grow their business,” said Ainslie Simmonds, President of Pershing X.

“The acquisition of Optimal Asset Management is the latest step in our Pershing X buildout, which aims to fuel growth by helping clients solve the challenge of managing multiple and disconnected technology tools and data sets,” said Jim Crowley, Pershing’s CEO. “As part of our continued efforts to provide clients with innovative offerings, we’re delighted to now be able to offer Optimal Asset Management’s direct indexing capabilities to our advisory clients within Pershing, as well as to our institutional and retail clients within BNY Mellon’s Investment Management business.”

Benefits to clients include:

• Personalized investor portfolios aligned to values and tax optimization benefits for investors
• Improved acquisition and retention efforts for advisors through deeper, more personalized investment planning

“We’re excited about joining Pershing X and the possibilities that we can jointly deliver to clients seeking customized direct indexing solutions. We are proud of the reputation we have built at Optimal Asset Management and the industry innovation we’ve delivered,” said Vijay Vaidyanathan, Founder and CEO of Optimal Asset Management.

PJT Partners is serving as financial advisor and Cooley LLP is serving as legal advisor to Optimal Asset Management. Sullivan & Cromwell LLP is serving as legal advisor to BNY Mellon’s Pershing. Closing of the transaction is subject to customary conditions and is expected to occur by the end of 2021.

Source: BNY Mellon