Japanese financial services firms Sumitomo Mitsui Financial Group and Daiwa Securities Group have concluded a memorandum of understanding (MoU) to merge their asset management arms.

The merger of Sumitomo Mitsui Asset Management (SMAM) and Daiwa SB Investments is currently subject to regulatory nod.

SMAM specialises in offering investment advice to domestic life and non-life insurance firms, and investment trusts for individual clients. Daiwa SB Investments offers services aimed at domestic and foreign pension funds and corporate clients. Together, the two entities employ around 1,000 staff.

“Going forward, through the enhanced business foundations and investment management capabilities resulting from the merger and the further acceleration of investments in technologies, the merged company will strengthen solutions offering to domestic investors looking for diversified international investment opportunities, the line-up of products offering to both domestic and foreign investors, including pension funds, and initiatives to address the changing retail asset management market given the shift from savings to asset building in Japan. Furthermore, it will consider various means to realise further growth, for example collaborating with or investing in other asset management groups; both domestic and foreign,” the companies said in a statement.

The combined group will become a consolidated subsidiary of Sumitomo Mitsui Financial Group and will also become an equity-method affiliate of Daiwa Securities Group and Mitsui Sumitomo Insurance Company.

Sumitomo Mitsui Financial Group, Daiwa Securities Group, Mitsui Sumitomo Insurance Company, Sumitomo Life Insurance Company, and Sumitomo Mitsui Trust Bank, will own stakes of 50.1%, 23.5%, 15%, 10.4%, and 1%, respectively in the merged entity.

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By GlobalData