Nikko Asset Management, the Japanese asset management firm, has completed its acquisition of Singapore-based DBS Asset Management in a deal that boosts Nikko's assets under management by $7.9 billion to around $165 billion, making it the largest regional asset manager in Asia. 

As part of the deal, DBS acquires a 7.25 per cent interest in the expanded Nikko AM business, effectively creating an alliance between the two firms. This covers a non-exclusive distribution agreement through which Nikko's investment products can be distributed to DBS' network in the Asian region. All employees of Nikko's Singapore unit will then transfer to DBSAM in the next weeks. The resulting firm shall be renamed Nikko Asset Management Asia Limited on or before 17 October 2011.

Other conditions of the agreement include the 100 per cent ownership by Nikko AM of DBSAM, a 30 per cent stake in Hwang-DBS Investment Management Berhad, the Malaysian fund management firm, a 51 per cent stake in Asian Islamic Investment Management and a 100 per cent stake in DBSAM's Hong Kong subsidiary. The Singaporean asset manager's 33 per cent holding in Changsheng Fund Management is not part of the transaction. 

“I am excited to announce that with the acquisition of DBSAM, we have become a truly local Singaporean company. Many of our team have had decades of experience working and living in Singapore and Asia, while Nikko AM has had an office in Singapore for more than 20 years,” said Timothy McCarthy, chairman and chief executive of Nikko AM.

Singapore will become the new centre of excellence for Nikko AM in Southeast Asia, said the firm, with larger teams of fund managers, operations and sales and marketing professionals.

“We would also like to welcome DBS as our new strategic shareholder and look forward to working with them to bring innovative Nikko AM investment products to their customers across the Asia-Pacific region,” McCarthy added.

Nikko AM already has a strong presence in China, where it is represented through a 40 per cent ownership in Rongtong Fund Management, a large fund management firm that is Sino-foreign owned. Nikko AM is majority-owned by Sumitomo Trust & Banking, while DBS is the second-largest shareholder. Nikko continues to operate independently following the transaction.