The Asia-Pacific chief executive of ING Investment Management, Grant Bailey, is to exit the firm, staff have been told internally.

It comes after negotiations between Ameriprise Financial, parent of Threadneedle Asset Management, and ING over the acquisition of the latter’s Asian investment business have broken down, sources indicate.

Shortly after AsianInvestor broke the news yesterday, ING released a statement to confirm that Bailey would be leaving and would be succeeded as CEO by Satish Bapat, who is currently chief financial officer. He will assume both roles, with his appointment subject to regulatory approval.

Notable by its absence, though, was any thanks to Bailey for his service at ING Investment Management, where he had worked for more than 10 years. He had been named CEO back in 2010 after Alan Harden’s exit.

Up to that point he had been Asia-Pacific regional general manager for ING IM. Between 2003 and 2007 he was Australia CEO of ING IM, before moving to Dubai to establish the firm’s investment operations in the Middle East. Before joining ING, he was with Citigroup Asset Management.

It is understood Bailey was involved in negotiations on the sale of ING IM and had been talking up the business to potential suitors. Whether he is now carrying the can for the failure of the sale to Ameriprise is not clear, and Bailey could not be reached for comment by press time.

It is understood Ameriprise was the one party (from four or five) that was interested in buying the whole of ING IM’s regional platform, which excludes Singapore and Japan.

It is mooted ING IM may now seek to sell off individual business lines, which was not the preferred option; that would be going the same way as the sales process for ING’s insurance business in Asia, which it had also hoped to sell to a single buyer.

Dutch financial services firm ING is selling off assets to repay a €10 billion ($12.9 billion) government bailout dating back to the 2008 financial crisis.

If ING IM has to resort to selling assets in piecemeal fashion, that would likely bring local suitors into play in the various Asian markets where it operates, complicating the sales process.

The key foreign parties understood to have expressed interest in ING’s Asian investments business are Ameriprise, Singaporean bank UOB, acquisitive Asian house Nikko Asset Management and the Royal Bank of Canada, which has been building in Asia.

“There was a desire [from ING] to sell the whole platform, but one of the difficulties was for the parties to get to grips with its overall platform and which particular assets they wanted,” a source close to the negotiations tells AsianInvestor.

“Ameriprise was the favoured option because it wanted everything, so that negotiation was progressing well. Now they [ING] may resort to plan B and sell off individual business lines. This would be a more messy sale, which is why the platform buyer [Ameriprise] was the preferred option.”

Asked why negotiations had broken down between ING and Ameriprise/Threadneedle, the source says he is not sure. “It could have been down to cost. I have heard [Ameriprise/Threadneedle] were very tough negotiators.”

However, sources indicate that profits in some of the markets for ING IM had started to fall, leaving parties less inclined to look at units in some countries.

The most attractive ING businesses are understood to be in South Korea, Taiwan and Thailand. But a negative point raised was a regulatory sanction imposed on ING IM in Taiwan in relation to personal trading by an individual two years ago, and this reared its head in the sale process. There was also talk of mandate losses in Taiwan.

“Korea, Taiwan and Thailand are probably strong enough businesses in their own right [to be sold alone],” says a source. “ING will get local suitors for some of their businesses, which is not the preferred option by [ING] staff because they want to be bought by a foreigner.”

Singapore is not part of the sale of ING IM’s units in Asia, with ING’s European business to retain it as a base for its Asian debt team. Further, Japan was considered too intertwined with ING’s insurance business, which is also being sold in Asia and is seeing private equity interest.

Only yesterday it was announced that pan-Asian insurer AIA Group had agreed to buy ING’s Malaysian insurance unit for an expected $1.5 billion to $1.7 billion, Reuters reported.

The sale, which is pending regulatory approval, would mark the first sale in ING’s auction of its Asian insurance operations announced in January.

Reuters said Canada’s Manulife Financial and Hong Kong tycoon Richard Li are in the running to buy the ING’s Japanese insurance business, while KB Financial Group is in advanced talks to buy ING’s South Korean operations. This information was not corroborated by the parties mentioned.

A spokesperson for Credit Suisse, which is advising ING on the sale of its investment management business, declined to comment on this story.

A spokesman for Threadneedle has not responded to AsianInvestor enquiries.