Asian financial groups seek AM acquisitions

Added 28th June 2016

Large-scale financial groups in Asia are actively looking to acquire western asset managers, said Daniel Celeghin of asset management consultancy Casey Quirk, which was acquired by Deloitte earlier this month.

Asian financial groups seek AM acquisitions

“Parent companies of the Chinese fund managers, such as the Chinese banks, insurers and securities firms, are very interested in acquiring overseas asset managers,” Celeghin, the firm's Asia-Pacific head of wealth management strategy, told FSA.

In April, Huatai Securities, China’s biggest brokerage by trading volume, acquired US wealth management technology firm AssetMark for $780m. 

The sale of AssetMark by auction attracted a number of Chinese firms, Celeghin said.

Ambitions are also shared by regional players, he added. For Casey Quirk’s APAC operations, it advises mainly regional firms based in Australia, Japan, Korea and China that want to expand overseas through acquisitions.

For instance, in December 2015, Japan’s Nomura Holdings paid $1bn for a 41% stake in mutual fund manager American Century.

Celeghin said the Japanese groups focus more on financial return. “The interest rate in Japan has been so low for so long, many groups have access to capital and want to deploy it overseas. Fund management is very attractive in terms of return of capital.

“In general, Japanese firms are the most experienced in overseas acquisitions, but frankly, a lot of the experience has been negative. So many of the Japanese clients are ambitious but also cautious, in terms of the execution risks,” he said.

Firms in North Asia, in particular the Chinese firms, have expertise in in domestic or regional equities.

“Usually they will start with a regional strategy [and expand gradually] because demand for these assets, although it exists in western markets, is bigger here in Asia.”

For instance, a team managing funds with a Greater China focus can, as the first step, expand to emerging Asia after a few years and eventually to global emerging markets, such as Latin America. "It's a strategy that a number of our clients have pursued or are interested in building," he said.

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