ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Business deals

MUFG to buy Commonwealth Bank investment units for $2.9bn

Australian acquisition part of push into asset management field

Mitsubishi UFJ Financial Group aims to become one of the world's leading asset management companies.   © Reuters

TOKYO -- Mitsubishi UFJ Financial Group will purchase asset management operations from Commonwealth Bank of Australia, that country's largest bank, in a deal estimated to be worth 328 billion yen ($2.9 billion), the Japanese megabank announced on Wednesday.

Mitsubishi UFJ Trust and Banking, part of the MUFG group, will wholly acquire multiple core subsidiaries from CBA's asset management group, Colonial First State. The deal, one of the biggest overseas asset management buyouts ever by a Japanese financial group, could close as soon as the fall of 2019.

The agreement, which Nikkei first reported earlier the same day, symbolizes the Japanese banking group's effort to shift away from traditional revenue streams, based on corporate loans. Low interest rates, in Japan and around the world, are pushing the group to look for more lucrative alternatives, such as asset management, especially in growing markets in the Asia-Pacific region. 

Aging populations in advanced economies and the rising middle class in emerging nations are expected to fuel a surge of investor money. Assets under management in the Asia-Pacific region are on track to grow 8.7% yearly through 2020, outpacing the global rate of 7%, according to PricewaterhouseCoopers.

MUFG's asset management segment, which is chiefly administered by Mitsubishi UFJ Trust, manages about 70 trillion yen of assets. The group said in July that it is Japan's third-largest asset manager, and 39th globally. The deal with Colonial will add roughly 20 trillion yen to its portfolio, putting the group at No. 1 domestically.

The biggest global asset managers control well over $1 trillion in assets, with top-ranked Blackrock managing $6.28 trillion at the end of 2017. Japanese financial groups have fallen behind by comparison, but Mitsubishi UFJ Trust aims to bring its assets under management closer to that threshold in a few years. The Colonial purchase will be the first acquisition toward that goal, and MUFG has a war chest of approximately 1 trillion yen for acquisitions.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends April 19th

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media