Nomura AM eyes buildout after buying ING IM Taiwan

Nomura Asset Management announced it has entered into an agreement to acquire ING Group’s Taiwanese investment management business – the penultimate piece in the break-up of that business.

The Japanese fund house, the fifth largest by Asia-Pacific-sourced assets with $312.4 billion, is buying the unit in partnership with an investment group led by Ashwin Mehta, the former chief executive of ING Securities Investment and Trust Company.

Mehta ran ING Site for more than three years to July this year. Nomura confirmed it teamed up with a group of investors led by Mehta to buy a 100% stake jointly, in undisclosed percentages. The purchasing entities are set to take board positions.

The unit is among the top 10 investment management firms in Taiwan with €5.2 billion ($7 billion) in AUM as at October 31. The acquisition is subject to regulatory approval and is expected to close in the second quarter of this year, ING confirmed. Financial details were not disclosed.

ING Group’s intention had been to sell its regional investment management platform whole. UOB, Nikko Asset Management and the Royal Bank of Canada were understood to have expressed interest.

But it was only after negotiations between Ameriprise Financial, parent of Threadneedle Asset Management, and ING finally broke down in 2012 that ING opted to sell its Asian IM business in piecemeal fashion. The failure of that sale was followed by the exit of ING IM's Asia-Pacific chief executive. 

The Taiwanese unit was considered one of its most attractive businesses in Asia, along with South Korea and Thailand.

But a negative point raised in the sale was a regulatory sanction imposed on ING IM in Taiwan in relation to personal trading by an individual several years ago, AsianInvestor was told. There was also talk of mandate losses, sources noted.

Nevertheless, Nomura AM has looked beyond these to reach an agreement. Currently in Asia ex-Japan, the firm has a presence in Australia, Hong Kong, India, Malaysia, Seoul, Shanghai and Singapore.  Its capabilities include portfolio management, investment management and research.

“The acquisition is part of our ongoing expansion in Asia and represents a very important opportunity for us to enter the Taiwanese market,” Toshihiro Iwasaki, CEO of Nomura Asset Management, said in a statement. “We aim to enhance our presence in the local market while continuing to build out our investment management business in Asia." 

ING now only has one piece left to sell of what was an award-winning investment management business in Asia. That is it’s almost 48% interest in its Indian investment management business.

Last year it sold ING IM Korea to Macquarie in a deal completed in December, ING Funds Thailand to Singapore’s UOB Asset Management in May and its 70% stake in Malaysian joint-venture ING Funds Berhad to Kenanga Investors in April.

ING Group has been selling off assets including its Asian investment and insurance franchises to repay a €10 billion ($12.9 billion) Dutch state bailout dating back to the 2008 financial crisis.

To date it has paid back €11.3 billion, including €8.5 billion in principal and €2.8 billion in interest and premiums. It is due to pay the third tranche in March this year and the last in May 2015.

ING Group’s restructuring was brought forward by two years to the end of 2016, by which time all divestments will have to have been completed.