Nikko Asset Management acquires DBSAM Singapore for SGD 137m

DBS has in turn acquired a 7.25% interest of the enlarged Nikko AM.

In a release, Nikko Asset Management Group and DBS Bank Ltd announced the completion of the agreement to combine DBS Asset Management Ltd and Nikko AM. The transaction boosts Nikko AM’s assets under management by USD7.9 billion to over USD165 billion2 and establishes Nikko AM as the largest regional asset manager headquartered in Asia.

The agreement involves Nikko AM acquiring DBSAM for SGD137 million (USD104 million). DBS has in turn acquired a 7.25%3 interest of the enlarged Nikko AM, forming a strategic alliance between the two companies. As part of the alliance, DBS and Nikko AM have entered into a non-exclusive distribution agreement through which Nikko AM’s investment products can be distributed throughout DBS’ network of core markets in the region. This arrangement brings together two award-winning firms with complementary strengths across products, investment platforms and distribution channels. The combined platform will be a strong source of product manufacturing, sales support and training for DBS.

DBSAM will continue to operate under the legal name DBS Asset Management Ltd until its new legal identity as “Nikko Asset Management Asia Limited” (“Nikko AM Asia”) comes into effect on or around October 17. The majority of DBSAM’s funds will be renamed ”Nikko AM Shenton”.

Employees of Nikko AM’s subsidiary in Singapore, Nikko Asset Management Singapore Limited (“NAMS”), will transfer to Nikko AM Asia within the next few weeks and thereafter, Nikko AM Asia will comprise the integrated investment capabilities and operations of DBSAM and NAMS. The enlarged Singapore asset manager will provide broad investment management expertise across Asian equities and Asian fixed income.

Timothy McCarthy, Chairman and CEO of Nikko AM commented: “I am excited to announce that with the acquisition of DBSAM, we have become a truly local Singaporean company. Many of our team have had decades of experience working and living in Singapore and Asia, while Nikko AM has had an office in Singapore for more than 20 years.

Singapore will become the new centre of excellence for Nikko AM in Southeast Asia, with larger teams of fund managers, operations and sales and marketing professionals providing the ideal foundation to grow Nikko AM’s business across the region.

We would also like to welcome DBS as our new strategic shareholder and look forward to working with them to bring innovative Nikko AM investment products to their customers across the Asia-Pacific region.”

Sim S. Lim, DBS Singapore Country Manager and DBSAM Chairman commented: “With the economic gravity shifting to Asia, DBS is focused on offering our customers a global investment strategy with an Asian bias. The strategic alliance will foster greater collaboration between the two organisations as we work together to create innovative Asian investment products and shorten the time to market of new offerings.

For example, since the agreement was announced, DBS has worked closely with Nikko AM to launch the DBS Asia Asset Allocator Fund and the DBSAM Japan Recovery Fund, enabling our customers to invest in Asia. This reinforces DBS’ commitment to taking our wealth management proposition to a new level as we execute against strategy to become the Asian bank of choice.

With the completion of the deal, we now look forward to developing even more insightful investment solutions with Nikko AM for the benefit of our customers.”

Under the terms of the agreement with DBS, Nikko AM has acquired:
(i) 100% of DBSAM, the asset management subsidiary of DBS;
(ii) a 30% stake in Hwang-DBS Investment Management Berhad (HDBS IM), Malaysia’s leading independent fund management firm;
(iii) a 51% stake in Asian Islamic Investment Management Sdn. Bhd. (AIIMAN); and
(iv) 100% of DBSAM’s Hong Kong subsidiary.