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Nearly every large financial group in Japan with an asset-management business is seeking ways to expand overseas, so Mitsubishi UFJ is in keeping with a recent trend. See the October edition of AsianInvestor magazine for details about which firms are best placed to succeed.
The asset management JV would seek to manage over S$1 billion of assets within the first two years of operations, according to company spokespeople. The business model involves marrying Mitsubishi UFJÆs extensive distribution network in Japan for raising funds to Kim EngÆs Asia ex-Japan investment and brokerage capabilities. The focus would be on investing in listed equities in Asia ex-Japan.
Under the memorandum of understanding, the two parties would also provide reciprocal equity brokerage and research services. Both parties by second key staff between them.
Kim Eng managing director Ronald Ooi also cited Mitsubishi UJFÆs balance sheet as a platform to help the brokerage firmÆs growth, allowing it to offer clients in Southeast Asia a wider range of investment products. By expanding Kim EngÆs business into asset management, it increases its exposure to fee-based income.
The firm already owns a 22.9% stake in Vision Investment Management, a leading fund of hedge funds in Hong Kong, and a 45% interest in Republic Investment Management, a Singapore company offering wealth management services.
Yasumasa Gomi, chairman and CEO at Mitsubishi UFJ Securities, says the deal represents a way to add Southeast Asia investment ideas to its offering to Japanese clients.
The deal also opens the door for Kim EngÆs largest shareholder, Taiwan-based Yuanta Financial Holdings, to develop businesses with Mitsubishi UFJ.
The AU$85 billion ($61.6 billion) Australian super fund has some exposure to indebted property developer Evergrande. Meanwhile, China’s construction finance is part of its core strategy in real estate.
Investors are seeing the risks, but also the opportunities of the logistics sector. Warehousing their fears for the moment, they can see it's a good conduit to high-growth assets.
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SGX’s new framework for Spacs will likely provide investors with a much-needed channel for direct deals, but the verdict is still out on whether it will bring liquidity to the bourse.