Sumitomo’s Nikko Asset Management (AM) and DBS Asset Management
(DBSAM) are to partner up to tap into Asia’s burgeoning affluent
population.

The agreement means Nikko AM, a subsidiary of Japan’s Sumitomo
Mitsui Banking Corporation (SMBC), will acquire DBSAM for
SGD137m ($104m) and DBS will acquire a 7.25% interest in Nikko
AM.

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The deal follows SMBC’s joint venture with
Barclays Wealth and SMBC-owned securities company Nikko Cordial
Securities in July 2010.

DBS’ Singapore asset management subsidiary and Hong Kong fund
management subsidiary will become part of Nikko AM.

 

Joint venture remodelling

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The combined asset manager will manage more than $150bn with an
investment platform offering increased product ranges, distribution
channels and geographies across Asia, particularly focusing on
Singapore and Hong Kong.

The tie-up plans to offer a range of investment funds to clients
and support individual DBS plans to grow its wealth management
business throughout the region, said Nikko AM chairman, Tim
McCarthy.

DBS chief executive officer Piyush Gupta said the tie-up with
Nikko AM will be an excellent source of product manufacturing,
sales support and training.

DBS’ 30% stake in HwangDBS Investment Management Berhad, its
Malaysian independent fund management firm, will also be injected
into Nikko AM alongside a 51% stake in Asian Islamic Investment
Management.

107 DBSAM employees will join Nikko AM operations.

DBS said the new venture will be
officially launched under a joint name towards first half
of 2011.

The transaction is subject to regulatory
approvals.