BNY Mellon's Brian Ruane: A View From One Wall Street
Born in the U.S. and raised in Ireland, BNY Mellon's Brian Ruane represents a new kind of Irish presence on Wall Street. His success is built on a sound understanding of financial practices on both sides of the Atlantic.
As Ireland emerges from its post Celtic Tiger hangover it is men like Brian Ruane who will be important to building new confidence in the structures there. His opinion is sought at the highest levels of government and academia.
In part, this is because he moves so easily between Ireland and America and has insight into both countries. Low-key but exuding a quiet confidence, Ruane has strong opinions on the need to be positive about Ireland, especially in difficult times.
Ruane and his wife, Dublin-born Anna Lynch, and their four kids, Sarah, Emma, Jack and Ellie, were about to embark on a family summer vacation to Ireland soon after we spoke. It is a country he is very familiar with.
Ruane was born in the U.S. and spent the early years of his life in Chicago before returning to Ireland with his father, who was born in Crossmolina, Co. Mayo, and mother, from Drumhaldry, Co. Longford.
He graduated from Coláiste Éanna, Rathfarnham, Dublin in 1982 and from The Chartered Association of Certified Accountants in the U.K. and Ireland in 1989 and the Zarb School of Business, New York in 1995.
That year, he returned to America and began working in financial services on Wall Street. Unlike many of the Irish who came to America a few decades before him, when Ruane returned to the U.S. he was already highly educated, prepared and poised to enter the world of international financial services.
At only 45 years of age, Ruane has already achieved so much. He served as BNY Mellon’s executive vice president of Client Management, where he had responsibility for financial institution clients during the financial crisis, and was named CEO of BNY Mellon’s Alternative Investment Services in 2009. Earlier this year, he assumed his current role as CEO of BNY Mellon Alternative and Broker-Dealer Services.
In his new position he oversees BNY Mellon’s successful hedge fund services business – much of it based in Ireland – but also elsewhere in Europe, Asia and North America, including New York, Luxembourg, Poland, Hong Kong, Singapore and Wilmington, Delaware. Today, it is estimated that over 40% of the world’s hedge funds are serviced in Ireland, and BNY Mellon has a lion’s share. Its 1,800 staff members make it one of Ireland’s largest employers.
Despite the difficult economy, the hedge funds industry is experiencing strong growth there, and BNY Mellon is at the forefront.
As reported by the Irish Funds Industry Association (which, significantly, is in the process of opening offices in the U.S. and London), in 2010 the Irish funds industry experienced a record-breaking year, reaching an all-time high of €1.9 trillion – up €0.5 trillion from 2009 – and this after a noticeable retreat during the financial crisis in 2008.
Ireland, together with Luxembourg, is now one of the preferred locations for setting up and housing hedge funds, due to its respected regulatory environment. It is home to 63% of all European hedge funds and administers 43% of global hedge funds. This growth, as many industry analysts and executives have pointed out, is significantly greater than that experienced by other parts of the world.
Though Ireland is enjoying particularly abundant growth in the funds industry, Ruane points out that this is the global trend within the alternative investment services industry. Alternative investments (hedge funds, funds of hedge funds, private equity funds – essentially most investments other than stocks, bonds and cash) are on the rise again, with confidence instilled by new, post-credit-crisis regulations. As a whole, the industry now has more than $2.5 trillion in assets under management.
BNY Mellon is a leader in alternative investments services both globally and in Ireland, along with State Street, JP Morgan and Citi. The company, which was formed four years ago in a merger between The Bank of New York and Mellon Bank, has strong ties to Ireland – Thomas Mellon, the founder of Mellon Bank, was originally from Omagh, Co. Tyrone – and is equally rooted in American history: Bank of New York, the oldest bank in the United States, was founded in 1784 by Alexander Hamilton. Both Mellon and Hamilton went on to be U.S. Secretary of the Treasury in their respective times.
Over the past fifteen years, the company has had an increasingly strong presence in Ireland. Today it has more than 1,800 employees in Ireland, working in corporate trust, clearing, investment servicing, and alternative investment services. Through its clearing arm, Pershing LLC, BNY Mellon is also a member of the Irish Stock Exchange and is an Irish regulated bank.
In BNY Mellon’s alternative investments branch, 550 of 1,600 global staff members are based in Ireland. Ruane describes the work done in Ireland as “a vital and growing part of our global footprint.” Ireland is not, he emphasizes, “a back office operation. It is an important business location in delivering the whole company to institutional clients. We have a strong country executive and management team, and extremely skilled employees. This is a big part of the success.”
Sitting in his office in the iconic One Wall Street building, Ruane explains his role and where he thinks the future lies for Ireland and his industry.
What are your views on the current state of the Irish economy?
My personal view is that many of the right building blocks are in place for economic recovery. The question is one of time. There are three big issues the economy is facing. One, unemployment levels are too high. Two, there is a need to re-capitalize the banking system. And three, the budget deficit.
All three of these issues are being addressed by the Irish government and its business leaders. In the funds services industry Ireland is experiencing a period of growth in employment levels and increased market share in the hedge fund industry. The Irish funds industry benefits from a highly regarded regulatory environment and a reputation for high quality staff and service levels.
These days, when most people think of Ireland, strength in the financial industry isn’t necessarily the first thing that comes to mind. Do you believe that is changing?
I think that in the fund services industry it is generally acknowledged that Ireland is quite strong.
BNY Mellon has been in Ireland for 15 years. We started off initially with a handful of staff and it has grown in line with our international business. So from our perspective we see it as a strong location to do business in Europe, an excellent place to recruit talented employees, supported by a good regulatory framework, and an equitable tax environment.
What are your responsibilities as CEO of BNY Mellon Alternative and Broker-Dealer Services?
I am fortunate to have responsibility for leading two businesses: alternative investment services, which was a start-up group seven years ago and is now one of our fastest growing investment servicing businesses, with $450 billion in assets under administration, and broker dealer services, one of our most well-established and well-regarded businesses. With broker dealer services, we provide government securities clearance and tri-party collateral management services to financial institutions and investors, facilitating financing transactions between investors and investment banks. This group manages $1.8 trillion in collateral daily.
With alternative investment services, we provide hedge fund administration, custody and banking services to hedge funds, private equity firms and their investors.
Both businesses place us at the center of the world’s capital markets, both in terms of how capital is being invested and how it gets accounted for.
What sort of growth has your industry, the alternative investment industry, experienced recently?
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