ING has made a bold move in Taiwan to expand its operational scale by merging its two existing securities enterprises in a drive to pool resources and increase its onshore competitiveness.
The merger of its securities investment consulting enterprise (Sice) and its securities investment trust enterprise (Site) was approved by the Financial Supervisory Commission this week.
According to data from consultancy Keystone Intelligence, ING Site had $4.7 billion in AUM at the end of June, while ING Sice had $4.2 billion.
While the latter is chiefly focused on distributing funds offshore by acting as master agent for Pioneer and Janus, the latter’s major business is onshore. Its onshore mutual funds collectively account for $2.2 billion, while it had almost $2 billion in domestic institutional mandates (although it does have some offshore funds and runs global mandates).
Once the transaction is completed, the new entity will retain the name ING Site. “The consolidation makes good sense as there is some overlap of functionality, with both companies having a master agent licence, for instance,” says Donna Chen, managing director of Keystone Intelligence.
If anything, this move is indicative of a trend among foreign firms in Taiwan. On January 1 this year PineBridge Sice also merged with its Site. And after acquiring nearly 100% of Taiwan International Investment Management last November, AllianceBernstein renamed the new entity AB Site and then announced plans to merge AB Sice into AB Site.
Chen notes that such mergers help foreign firms to meet headcount requirements set by the FSC this January, which were introduced to encourage offshore fund master agents to dedicate more human resources to Taiwan.
The FSC now requires that a company with an average AUM of between NT$100 billion and NT$200 billion over the last three years must employ at least 20 sales staff.
ING Site declined to discuss its merger with AsianInvestor. As at the end of July, ING Site’s market share of onshore mutual funds was 3.47% among 38 Sites, while it had 23 domestic mandates with a combined NT$77.6 billion in assets – far higher than most foreign firms.