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

Sumitomo Mitsui to buy British emerging-market asset manager

TTI deal aims to offer new options to yield-starved Japanese investors

With years of ultralow interest rates squeezing returns, the Japanese megabank is turning to asset-based fees to generate a reliable stream of revenue.

TOKYO -- Sumitomo Mitsui Financial Group will acquire London-based asset manager TT International, seeking to leverage the company's expertise in emerging-market equities to attract Japanese investors hamstrung by low domestic returns.

The Tokyo-based megabank is expected to spend the equivalent of about 20 billion yen ($188 million) on the acquisition itself, though the total cost could rise as high as 35 billion yen after accounting for performance-based compensation provisions. The transaction is slated to close this fiscal year.

TTI had $8.4 billion in assets under management at the end of July, with about 60% invested in emerging-market stocks in Asia and elsewhere. Its emerging-market funds have mostly outperformed TTI's chosen benchmark, the MSCI Emerging Markets Index, according to the firm's disclosures. Its customers include pension funds in North America and the U.K.

SMFG will offer TTI products to Japanese institutional investors to bolster the group's overall asset balance. With years of ultralow interest rates squeezing returns, the megabank is turning to asset-based fees to generate a reliable stream of revenue.

While TTI will operate separately from SMFG unit Sumitomo Mitsui DS Asset Management, SMFG hopes to have them share expertise through personnel exchanges, for example.

The acquisition follows Mitsubishi UFJ Trust and Banking's roughly $2.7 billion purchase of Commonwealth Bank of Australia's global asset management operations.

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 June 30th

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