ASIA - Japan's Nikko Asset Management is strengthening its presence among institutional investors as it announced a deal to buy key parts of rival DBS Asset Management this morning.
It is its second acquisition of a mainly institutional asset management rival in the region in under a month.
The $120bn Japanese asset manager, previously owned by Citi and since 2009 part-owned by the Sumitomo Trust & Banking Co, is acquiring key parts of the $21.8bn investment management unit of DBS Bank.
DBS Bank will take a minority stake in Nikko AM, with whom it will distribute products throughout southeast Asia as part of the agreement.
Nikko said last month it would buy $25bn Australian rival Tyndall Investments from Suncorp Group.
Some 56% of DBS AM's assets are institutional, while 89% of Tyndall's are from non-retail clients. Ahead of these acquisitions, only 32% of Nikko's assets were institutional.
The two latest transactions will propel Nikko AM's total assets beyond $150bn, and assist the manager in its aim to become a key investment manager throughout the region.
Nikko AM is also a 40% shareholder of Rongtong Fund Management Company, China's sixth largest fund management joint venture with a foreign firm.
Charles Beazley, Nikko AM's head of international and institutional businesses, said: "Asia is the fastest growing component of the global economy. Japan and China, while representing the two largest nations economically, do not reflect the diversity and range of opportunity offered to an investor across the whole region."
He added Asia was as interesting a region to invest in as to do business in: "Over the last decade or more, all the Asian economies have benefited from a gradual, and, in most places, reasonably consistent improvement in both political and financial stability. This process is ongoing and will continue to enable an improved business and capital markets environment which investors want to capture."
The units that DBS AM will transfer to Nikko will be its Singapore and Hong Kong asset management subsidiaries; its 30% stake in Malaysian investment manager HwangDBS Investment Management Berhad; and its controlling stake in Asian Islamic Investment Management Sdn Bhd, also in Malaysia. Some 107 staff will also move to Nikko AM.
DBS AM's core competencies are Asian fixed income, Asian equities and absolute return strategies. Nikko AM's are equities and fixed income in traditional and alternative format in both developed and emerging markets.
Nikko AM also recently hired Blair Pickerell, previously chief executive of Morgan Stanley Investment Management in Asia, as its head of Asia, based in Hong Kong. He reports to Beazley, who moved earlier this year from London to Tokyo. (Global Pensions; August 26, 2010)
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