Japanese bank Mitsubishi UFJ Trust and Banking Corporation has purchased Colonial First State Global Asset Management from Commonwealth Bank of Australia for A$4.13 billion ($2.93 billion; €2.58 billion).
CBA announced the sale of the firm, known outside Australia as First State Investments, in a statement to the Australian stock exchange today, after saying in June it intended to demerge its wealth management and mortgage broking businesses, including its global asset management arm.
MUTB approached CBA to discuss buying the asset management business following that announcement, CBA said, with the Australian bank’s board subsequently deciding it was in the “best interests of clients, employees and shareholders” to explore the possibility of a sale.
As at 30 June 2018, CFSGAM managed A$213 billion of assets worldwide from offices in Europe, the United States and across the Asia-Pacific region.
The value of its infrastructure portfolio stands at approximately $11.13 billion, and it raised €1.4 billion for the second series of its European Diversified Infrastructure Fund II in June this year, taking the fund’s total size to €2.1 billion.
It is unclear what impact MUTB’s acquisition will have on fundraising activity and whether any changes will be made to the asset manager’s leadership team. Mark Lazberger, the firm’s chief executive of 10 years, announced his departure earlier this year, while European co-head of infrastructure investments Philippe Taillardat left in September 2017.
It is also unclear whether there will be any impact on jobs or company structure.
CBA, CFSGAM and MUTB did not respond to requests for comment by time of publication.
CBA said in its statement that the sale price represented a multiple of 17.5x CFSGAM’s FY18 net-profit after tax of A$236 million. The transaction is subject to regulatory approvals in several countries, including Australia, Japan, Hong Kong, Singapore, the United Kingdom and the US, and is expected to complete in mid-2019.
MUTB already owns a partial stake in another Australian asset manager, AMP Capital, acquiring a 15 percent stake in that business in 2011 for $425 million.
In its own statement on the purchase of CFSGAM, MUTB acknowledged its “existing strategic alliance” with AMP Capital. It said the alliance would continue to be an “integral part” of the Japanese bank’s asset management strategy and that AMP Capital would “play an essential role to provide competitive investment capability in the midst of increasing demand or various products”.
A source familiar with the arrangement told Infrastructure Investor that MUTB distributes AMP Capital’s products to Japanese institutional and retail investors, offering 10 retail and three institutional funds. In terms of infrastructure, MUTB has contributed to raising A$1.5 billion in commitments from a number of Japanese institutional clients since the launch of AMP Capital’s Global Infrastructure Fund and Infrastructure Debt Series.
MUTB president and CEO Mikio Ikegaya said the latest acquisition would enable the bank to “deliver new investment opportunities” to its clients.
As a result of the sale of CFSGAM, the asset manager will no longer be part of the planned demerger of CBA’s wealth management business, which will still go ahead and will include superannuation provider Colonial First State alongside several other businesses, including Count Financial, Financial Wisdom and Aussie Home Loans.
CBA today announced the appointment of Jason Yetton as the new CEO of the demerged entity, with Andrew Morgan appointed CFO, both effective from 1 December 2018.
Yetton is currently CEO of Australian personal loans provider SocietyOne and previously spent more than 20 years at Westpac and BT Financial Group, including a stint as group executive for Westpac Retail and Business Banking.
Morgan is currently CFO, wealth management, at CBA and has more than 25 years’ experience in the financial services and property sectors, including roles with National Australia Bank, Perpetual and Lendlease.
The demerger is expected to complete in late 2019, CBA said.
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