XL Capital is selling its 30 percent stake in London's Pareto Partners, a currency and asset manager, for undisclosed terms.

Mellon Financial Corp. on Friday said it would buy the 70 percent of Pareto, which has more than $40 billion under management, it does not already own. from Pareto's employees and XL.

In a statement Friday, Mellon vice chairman and president of the institutional asset management business, Ronald O'Hanley, described Pareto's currency management as "an increasingly integral part of our strategic growth plans".

Mellon will also acquire Pareto's global fixed-income asset management business, which has $3 billion under management.

In a separate deal, Pareto plans to sell its New York-based core and high-yield fixed income asset management businesses, which have around $3 billion under management, to MacKay Shields LLC. Financial terms of that deal were not disclosed.

Mellon has had a stake in Pareto since 1991.

Pareto's employees own roughly 40 percent of the company, while XL has about 30 percent. Mellon's acquisition is subject to regulatory approvals, but the company expects the deal to close in the third quarter.

Mitchell Harris, Pareto's chief executive, will become nonexecutive chairman, and head of portfolio services Michael Shilling will take over as CEO, Mellon said. Mr. Harris has been named CEO of Mellon affiliate Standish Mellon in Boston.

Mellon also owns The Dreyfus Corp. in New York and Newton Investment Management Ltd. in the United Kingdom, and has about $3.6 trillion in assets under management, administration or custody.