Nikko Asset Management has announced it has reached an agreement with DBS Bank to acquire DBS Asset Management, the asset management arm of DBS Bank. In return, DBS Bank will become a strategic minority shareholder in Nikko AM, taking a 7.25% stake in the Tokyo-based firm. This transaction will add $7 billion in assets under management to Nikko AM and significantly broaden the firm's distribution capabilities in Asia.

The agreement also establishes a strong strategic alliance between Nikko AM and DBS Bank, bringing together two firms with complementary strengths across products, investment platforms, distribution channels and geographies. As part of this arrangement, Nikko AM and DBS Bank will enter into a non-exclusive distribution agreement through which Nikko AM’s investment products can be distributed via DBS’s networks in core markets in the region.

Under the terms of the agreement, DBS Bank will inject into Nikko AM:

- its Singapore asset management subsidiary;
- its 30% stake in HwangDBS Investment Management Berhad;
- its 51% stake in Asian Islamic Investment Management Sdn Bhd, an Islamic fund management firm in Malaysia (the other 49% of which is owned by HwangDBS Investment Management); and
- its Hong Kong fund management subsidiary.

A total of 107 staff will move to Nikko AM as a result of this acquisition.

DBSAM’s 33% stake in Changsheng Fund Management, a joint venture fund management company in China, will not be part of the transaction and will be held by DBS Bank. Nikko AM is already a 40% shareholder of Rongtong Fund Management Company, the 6th largest Sino-foreign joint venture fund management company in China.

Subsequent to this transaction as well as the recent acquisition of Tyndall Investments, Nikko AM will have nearly 30% of its assets sourced from outside Japan and close to 40% of its employees based internationally.

Chairman and CEO Tim McCarthy commented: “We are extremely pleased to announce today the agreement reached with DBS to acquire its first-rate asset management division, DBSAM. We welcome DBS as an important strategic shareholder in Nikko AM and look forward to partnering with DBS to further enhance the wealth management products offered to the bank’s many clients.”

Charles Beazley, Head of International and Institutional Businesses, noted: “DBSAM is one of the largest mutual fund managers in Singapore and a leading investment management firm in Southeast Asia. The agreement announced today with DBSAM is a key component in Nikko AM’s continued expansion across Asia. The strategic alliance with DBS Group will strengthen our ability to distribute investment products in the rapidly growing Asian markets.”

Blair Pickerell, Head of Asia and Global Chief Marketing Officer, stated: “This strategic alliance between DBS Bank and Nikko AM is very exciting. DBS Bank aims to become a leading regional bank in Asia, while we intend to become one of the region’s leading asset management firms, so there is much scope for us to grow together.”