MUFG's trust bank to expand asset management ops via buyouts
Japanese giant ready to spend $9bn-plus over four years
TOKYO -- Mitsubishi UFJ Trust and Banking seeks to build a solid foundation to compete globally in the asset management business by expanding its portfolio to around 100 trillion yen ($905 billion) from the current 60 trillion yen or so.
The trust bank will spend up to 1 trillion yen through the fiscal year ending March 2021 to purchase mainly players in Europe, the U.S. and Asia, President and CEO Mikio Ikegaya told The Nikkei. The Tokyo-based arm of Mitsubishi UFJ Financial Group has already acquired five asset management firms abroad since 2013.
"The asset management business is growing around the world, but the competition is tough as well," said Ikegaya, who noted that "in order to win, we need a client base with over 100 trillion yen in assets."
The goal is to rank in the top 15 globally, he said.
MUFG had 71 trillion yen in assets under management at the end of 2015. This placed it at 37th in the world, behind such compatriots as Sumitomo Mitsui Trust Holdings and Nippon Life Insurance, which ranked No. 33 and No. 36.
Demand for asset management services is only expected to grow as populations in Japan and other mature economies age and as the middle classes in emerging economies expand. With European and American players recently pursuing big acquisitions to bolster operations, Mitsubishi UFJ Trust sees stepping up acquisitions as a means of survival.
MUFG announced plans in May for restructuring the banking group. A key part of this is merging corporate lending operations now run separately by Mitsubishi UFJ Trust and fellow core unit Bank of Tokyo-Mitsubishi UFJ. Mitsubishi UFJ Trust's risk assets will decrease significantly when about 12 trillion yen in loans to businesses are transferred to BTMU next April.
"We will rebuild our trust banking operations" to fill that gap, Ikegaya said.
"We will be able to take new risks, allowing us to plan an acquisitions strategy at an unprecedented scale in the asset management space," he added.