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Business deals

UBS and Sumitomo Mitsui form alliance to target Japan's wealthy

Asset-management partners see opportunity in $16tn market

UBS and Sumitomo Mitsui Trust Holdings will launch a wealth management venture as soon as 2021.

TOKYO -- Swiss bank UBS and Japan's Sumitomo Mitsui Trust Holdings will form an asset-management joint venture that will target wealthy Japanese individuals seeking global investment opportunities, Nikkei has learned.

The two sides are expected to ink an official agreement in Switzerland on Friday at the earliest, and the aim is to establish the new company in 2021. UBS will control a majority stake at 51%, while Sumitomo Mitsui Trust will hold the rest. UBS will transfer its wealth management functions in Japan into the joint venture.

The low interest rates on a global scale are creating headwinds in the Japanese lending industry, and the private asset-management business has become one of the few areas of growth in the financial sector. Financial assets held by Japan's individuals total roughly 1.8 quadrillion yen ($16.6 trillion). About 2.8 million citizens are worth at least $1 million, according to one estimate, and those ranks are expanding, thanks in large part to tech startups.

UBS is the world's largest wealth manager, overseeing about $2.4 trillion in assets at the end of 2017. The Swiss group also sits atop the Asian heap, with $357 billion in assets under management. Sumitomo Mitsui Trust, whose core unit is Sumitomo Mitsui Trust Bank, has a long track recrod in managing assets in Japan, including real estate.

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