The takeover of the asset management arm of DBS Bank Ltd by Nikko will make the combined entity the largest asset manager to be based in Asia, adding $7.9bn in assets under management for a total AUM of more than $165bn, according to a statement released by Nikko.
The deal also creates a strategic alliance between the two companies, as it involves DBS acquiring a 7.25% interest in the resultant asset management company.
As part of the alliance, DBS and Nikko AM have entered into a non-exclusive distribution agreement, through which Nikko AM’s investment products may be distributed through DBS’ regional network of offices.
Nikko AM chairman and chief executive Timothy McCarthy said the acquisition of DBSAM has made Nikko, which has had a presence in Singapore for more than 20 years, “a truly local Singaporean company”.
“Singapore will become the new centre of excellence for Nikko AM in Southeast Asia,” he added, noting that it would provide “the ideal foundation to grow Nikko AM’s business across the region”.
In addition to 100% of DBSAM, the deal with DBS also gives Nikko a 30% stake in Hwang-DBS Investment Management Berhad (HDBS IM), Malaysia’s leading independent fund management firm; a 51% stake in Asian Islamic Investment Management Sdn. Bhd. (AIIMAN); and 100% of DBSAM’s Hong Kong subsidiary.
DBSAM’s 33% stake in the Chinese fund manager Changsheng Fund Management, however, is not part of the transaction, and has been transferred to DBS.
Nikko AM already has a strong presence in China, via its 40% ownership of Rongtong Fund Management, the seventh-largest Sino-foreign joint venture fund management group in China, according to Nikko.
