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Nikko AM, DBS AM team up to create a $150bn asset management team in Asia

Thursday, December 09, 2010
Opalesque Industry Update - Tokyo, Japan-based Nikko Asset Management (Nikko AM), the $117.6bn investment management firm, has announced it entered into an agreement with DBS Bank Ltd., to acquire DBS Asset management, the asset management arm of DBS Bank. In return, DBS Bank will become a minority stakeholder in Nikko AM with a 7.5% stake. The agreement will increase the combined AuM of the firm to more than $150bn, making it the largest asset management company in the asian region, according to a joint press release from the two firms.

The two firms said the merger would significantly increase their products and capabilities, as well as provide service to its affluent population.

Under the terms of agreement, Nikkko AM will acquire DBS AM for $104m, and DBS will acquire a 7.25% stake in Nikko AM tht will allow the bank to participate in future growth of the combined business.

Piyusha Gupta, Chief Executive Officer of DBS, said, “Asia is creating wealth faster than anywhere else in the world and as a bank born and bred in tthis region, we are well-placed to tap this growth. The tie-up with a partner like Nikko AM, that shares DBS’ deep commitment to Asia, will enable us to build scale, while leveraging DBS AM’s investment and structuring capabilities. The combined platform will be an excellent source of product manufacturing, sales support and training, and with our expanding presence in Asia, it wil lalso benefit DBS’ extensive distribution network in the region,. This is yet another step toward executing against our strategy to build a top-notch Asian wealth management franchise.”

A separate statement issued by Nikko AM stipulates other key features of the agreement. Under the deal, DBS 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 Islamid fund management firm in Malaysia (the other 49% of which is owned by HwangDBS Investment Management); and
  • Its Hong Kong fund management subsidiary.
Tim McCarthy, Chairman and Chief Executive Officer of Nikko AM commented on the deal, “With its first-rate investment team and extensive regional network and knowledge, DBS AM will be a strong strategic fit with Nikko AM as we reinforce our position as a leading and cutting edge investment management firm in the region. We particularly look forward to working with DBS to offer an exciting range of investment funds to their clients and to support DBS’ plans to grow its wealth management business throughout the region.”

The deal with DBS came three weeks after Nikko AM agreed to buy Sydney-based Tyndall Investments from Australian financial services group Suncorp for $80m. Tyndall is the 15th largest fund manager in Australia and the fifth largest in New Zealand, with A$25bn in AuM.

Moving forward, Nikko is hoping to establish a strong position in Australia, New Zealand and Malaysia as well as significantly enhance its presence in Singapore and Hong Kong.
- Komfie Manalo

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