TOKYO--(BUSINESS WIRE)--Nikko Asset Management Co., Ltd. ("Nikko AM") today announced it has reached an agreement with DBS Bank Ltd ("DBS Bank") to acquire DBS Asset Management ("DBSAM"), the asset management arm of DBS Bank. In return, DBS Bank will become a strategic minority shareholder in Nikko AM, taking a 7.25% stake in the Tokyo-based firm. This transaction will add US$7 billion in assets under management to Nikko AM and significantly broaden the firm's distribution capabilities in Asia.
The agreement also establishes a strong strategic alliance between Nikko AM and DBS Bank, bringing together two firms with complementary strengths across products, investment platforms, distribution channels and geographies. As part of this arrangement, Nikko AM and DBS Bank will enter into a non-exclusive distribution agreement through which Nikko AM's investment products can be distributed via DBS's networks in core markets in the region.
DBS Asset Management is widely recognized as one of the leading investment management firms in Southeast Asia. Under the terms of the agreement, DBS Bank will inject into Nikko AM:
- its Singapore asset management subsidiary;
- its 30% stake in HwangDBS Investment Management Berhad, Malaysia's leading independent fund management firm;
- its 51% stake in Asian Islamic Investment Management Sdn Bhd, an Islamic fund management firm in Malaysia (the other 49% of which is owned by HwangDBS Investment Management); and
- its Hong Kong fund management subsidiary.
A total of 107 staff will move to Nikko AM as a result of this acquisition.
DBSAM's 33% stake in Changsheng Fund Management, a joint venture fund management company in China, will not be part of the transaction and will be held by DBS Bank. Nikko AM is already a 40% shareholder of Rongtong Fund Management Company, the 6th largest Sino-foreign joint venture fund management company in China.
This transaction follows just three weeks after Nikko AM signed an agreement to acquire Tyndall Investments, a leading investment management firm in Australia and New Zealand, and entered into a strategic distribution alliance with Suncorp. Nikko AM has made public its intention to build on its strong base in Japan to become one of the leading investment management firms in the Asian region. As a result of these two transactions, which are expected to close during the first quarter of 2011, Nikko AM will add approximately US$32 billion of AUM to its books, bringing the firm's total AUM to over US$150 billion. In the process, Nikko AM has also established strong positions in Australia, New Zealand and Malaysia as well as significantly enhancing its presence in Singapore and Hong Kong.
The award-winning DBSAM is one of the largest and most experienced asset management companies in Singapore and the wider Southeast Asian region, managing investments for retail, private and institutional investors. The company offers a full range of investment management solutions among all asset classes with core competencies in Asian fixed income, Asian equities and absolute return strategies.
Subsequent to this transaction as well as the recent acquisition of Tyndall, Nikko AM will have nearly 30% of its assets sourced from outside Japan and close to 40% of its employees based internationally.
[Chairman and CEO Tim McCarthy commented]: "We are extremely pleased to announce today the agreement reached with DBS to acquire its first-rate asset management division, DBSAM. We welcome DBS as an important strategic shareholder in Nikko AM and look forward to partnering with DBS to further enhance the wealth management products offered to the bank's many clients."
[Charles Beazley, Head of International and Institutional Businesses, noted]: "DBSAM is one of the largest mutual fund managers in Singapore and a leading investment management firm in Southeast Asia. The agreement announced today with DBSAM is a key component in Nikko AM's continued expansion across Asia. The strategic alliance with DBS Group will strengthen our ability to distribute investment products in the rapidly growing Asian markets."
[Blair Pickerell, Head of Asia and Global Chief Marketing Officer, stated]: "This strategic alliance between DBS Bank and Nikko AM is very exciting. DBS Bank aims to become a leading regional bank in Asia, while we intend to become one of the region's leading asset management firms, so there is much scope for us to grow together."
About Nikko Asset Management
Nikko Asset Management (Nikko AM) is a leading Asian investment management company. Headquartered in Tokyo, Nikko AM has total AUM of US$120 billion as of September 2010. The recently announced acquisition of Tyndall Investments in Australia and New Zealand will add a further US$25 billion of AUM, with the DBSAM acquisition increasing this by an additional US$7billion.
Established in 1959, Nikko AM is one of the largest asset management
companies in Japan, with its investment products sold by over 200
distributors. The firm currently also has offices in Singapore, London,
New York, and Hong Kong, and the Tyndall Investments acquisition will
add Sydney, Melbourne, Brisbane, and Auckland to Nikko AM's global
footprint. Nikko AM also has a 40% stake in Rongtong Fund Management
Company, one of the largest Sino-foreign joint venture investment
management companies in China.
Nikko AM offers retail and institutional investors access to a wide range of investment strategies, including equities and fixed income as well as traditional and alternative asset classes in multiple markets, developed and emerging. The company operates with a "multi local" approach, giving management in each market a high degree of autonomy to address local market conditions and client service needs, which the firm believes vary widely from market to market.
Nikko AM's stable management team has significant Asian regional and global expertise which has been key in achieving growth. Nikko AM has been awarded a number of prestigious awards including in 2010 the Lipper Fund Award in the Equity Asia Pacific Ex Japan Category over 3 years and the Global Investor for Investment Excellence in Japanese Equities.
Since 2009 Nikko AM has been owned by The Sumitomo Trust & Banking Co. Ltd. and by its employees. Nikko AM continues to operate independently. For more information, please visit http://en.nikkoam.com.